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> Bill.com is licensed as a money transmitter in California. Also in nearly every other state: https://www.bill.com/legal/licenses https://www.bill.com/legal/

> Bill.com is licensed as a money transmitter in California. Also in nearly every other state: https://www.bill.com/legal/licenses https://www.bill.com/legal/licenses It is not only California law that matters here. > The funds are supposed to be in a trust account, with Bill.com acting as a fiduciary. It's important to be sure that's actually the case. This really matters if Bill.com goes bankrupt. If the funds are in a trust account, you get them back, reasonably quickly. Otherwise... I'm not sure that the money needs to be held in a segregated "trust account" as such for it to be considered "money held in trust", if the money transmitter law explicitly specifies that the customer funds are funds held in trust. > Money transmitters are regulated primarily for consumer protection purposes. Businesses are expected to take measures to protect themselves. Large customers of Bill.com really need to nail down exactly who owns that money. This is really getting into the weeds with regards to how a bankruptcy court would handle a case like this, if Bill.com were ever to go bankrupt. I will agree with you that it does seem like an interesting question: If Bill.com is acting as an agent-of-a-payee on behalf of one of its customers, and is therefore somehow exempted from CA money transmitter law for purposes of licensing and regulation vis-a-vis that particular customer, does that also mean that such a customer's funds should not be considered "funds held in trust" for purposes of bankruptcy? I very much doubt that any court will ever get the chance to rule on this question, however, because Bill.com is licensed as a money transmitter and doesn't seem to be attempting to avail itself of the agent-of-a-payee exemption. It would have to be a creditor of Bill.com arguing to the court that in spite of Bill.com's status as a money transmitter, particular customers' accounts should be exempted from money transmitter laws, and that those particular customers should be treated as ordinary unsecured creditors. It would be such a travesty of justice for that to happen, I cannot imagine that any judge would agree to such a thing. Besides, the DFI would shut Bill.com down before they ever got close to bankruptcy, and there really is no reason to think that Bill.com will ever go bankrupt.

Animats 5y ago
This is really getting into the weeds with regards to how a bankruptcy court would handle a case like this. Agreed. Still, one of the early posters here mentioned having an amount in high six figures in a Bill.com account. At that level, you want such issues nailed down. There really is no reason to think that Bill.com will ever go bankrupt. Their financial statements indicate they're operating as a "buy growth or die" startup, even after going public. They spend a huge amount on marketing. Marketing is more than twice cost of sales. They still lose huge amounts of money. They're taking on debt. Sometimes that works, as it did for Amazon. Sometimes it doesn't. Some analysts are worried.[1] [1] https://seekingalpha.com/article/4484590-billcom-bill-stock-further-losses-follow https://seekingalpha.com/article/4484590-billcom-bill-stock-...

Animats 5y ago

This is really getting into the weeds with regards to how a bankruptcy court would handle a case like this. Agreed. Still, one of the early posters here mentioned having an amount in high six figures in a Bill.com account. At that level, you want such issues nailed down. There really is no reason to think that Bill.com will ever go bankrupt. Their financial statements indicate they're operating as a "buy growth or die" startup, even after going public. They spend a huge amount on marketing. Marketing is more than twice cost of sales. They still lose huge amounts of money. They're taking on debt. Sometimes that works, as it did for Amazon. Sometimes it doesn't. Some analysts are worried.[1] [1] https://seekingalpha.com/article/4484590-billcom-bill-stock-further-losses-follow https://seekingalpha.com/article/4484590-billcom-bill-stock-...