On January 2, 2025, Massachusetts Governor Maura Healey signed the state’s new Money Transmission Act (“MTA” or the “Act”), Bill H4840, into law. This introduces more stringent money transmission regulations for transmitters operating in the state. With this new law, Massachusetts will become one of the more highly regulated states for money transmission.
Under the previous statutory framework, only entities involved in transmitting money to foreign locations were required to secure a license. However, the new MTA broadens this scope considerably. Now, any entity involved in the sale or issuance of payment instruments or stored value, as well as those receiving money for transmission within Massachusetts, must obtain licensure and will fall under the regulatory purview of the Massachusetts Division of Banks.
Governor Healey, in her approval of the MTA, highlighted the legislation’s aim to safeguard Massachusetts consumers utilizing payment apps for transactions with peers and businesses. This consumer protection ethos is echoed in the new Act’s provisions, which include stringent requirements for refunds, receipt provision, and limitations on the investment of customer funds.
Interestingly, the MTA does not extend its regulations to encompass virtual currencies, diverging from some aspects of the Model Money Transmission Modernization Act (“Model Act”), which served as an inspiration for the MTA’s structure.
The MTA is set to take effect in September 2025. Its enactment marks a significant shift in Massachusetts’ regulatory approach, positioning it among the last states to implement stringent regulations on all forms of money transmission. Once effective, Massachusetts will join nearly half of the states in the country that have adopted regulations closely aligning with the principles of the Model Act. However, as with many states that have adopted portions of the Model Act, Massachusetts regulations feature distinct provisions reflective of its independent regulatory path.