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Coming from a financial services guy: Look at the legal aspects first before you sit down and write code. It sounds like you are jumping right into the transf

by gm 18y ago

Coming from a financial services guy: Look at the legal aspects first before you sit down and write code. It sounds like you are jumping right into the transfer money aspect of it, bypassing the laws ytou need to comply with. If you are in the middle of a money transactions you are subject to many federal and state laws, and if you deal with international, you are subject to more federal and state laws, as well as those of the country you are transferring to. You will be imprisoned if you do not. Since Sept 11 everyone involved takes these things extremely seriously, they will jail you first, and investigate later. (not to mention close your company and impound all your equipment). EDIT: And you will need much more than your gut estimate of $1.5 mill because there are huge bonds to be put in _per_state_ you want to do business in. Money transmission is not a business for the small guy any more. EDIT2: Have a sip of the legal requirements http://www.fincen.gov/ http://www.fincen.gov/ (this is just for the federal government, each state has its own office that places additional restrictions on you as well)

coglethorpe 18y ago
Do these rules apply for a gateway like Authorize.net, or just the banks they communicate with? If so, starting up something like that must be a massive undertaking.
- gm 18y ago
  Financial rules apply to any company that does transactions that could reach a high volume (one of the magic numbers is USD $10,000). So, for example, a car dealership that does single transactions of over $10,000 must comply with several regulations already, including checking the OFAC list (google it) for possible matches of people forbidden to do business with US companies (Believe me, you do NOT want to get caught as the inadvertent money laudering agent for a terrorist organization; your ass is going straight to federal prison even if you did not mean to be their money laundering instrument). You must also check for structured transactions (transfer $20,000 USD in small transactions so they do not go on the radar), etc... The laws are very strict on this nowadays, and people who make themselves be the middleman in a financial transaction are at great risk of getting into trouble if they do not do what they are required to (by the various goverment regulators, both federal and state). I am talking about criminal charges, not just civil penalties. The banks must do their own compliance work, but that does not absolve - in any way - the company that is doing the transactions from doing so as well. It is mostly a cover your ass thing, rather than an "as long as someone in the chain reports it" thing. So yeah, the legal compliance in this business is - vastly - the more complex part of the business. The technology is the easy part.

by gm 18y ago

coglethorpe 18y ago

Do these rules apply for a gateway like Authorize.net, or just the banks they communicate with? If so, starting up something like that must be a massive undertaking.

gm 18y ago
Financial rules apply to any company that does transactions that could reach a high volume (one of the magic numbers is USD $10,000). So, for example, a car dealership that does single transactions of over $10,000 must comply with several regulations already, including checking the OFAC list (google it) for possible matches of people forbidden to do business with US companies (Believe me, you do NOT want to get caught as the inadvertent money laudering agent for a terrorist organization; your ass is going straight to federal prison even if you did not mean to be their money laundering instrument). You must also check for structured transactions (transfer $20,000 USD in small transactions so they do not go on the radar), etc... The laws are very strict on this nowadays, and people who make themselves be the middleman in a financial transaction are at great risk of getting into trouble if they do not do what they are required to (by the various goverment regulators, both federal and state). I am talking about criminal charges, not just civil penalties. The banks must do their own compliance work, but that does not absolve - in any way - the company that is doing the transactions from doing so as well. It is mostly a cover your ass thing, rather than an "as long as someone in the chain reports it" thing. So yeah, the legal compliance in this business is - vastly - the more complex part of the business. The technology is the easy part.