Again, the high barrier is the entire point. With the current regulations, if the transfer company goes belly up, the state, who would be forced to cover any t

Again, the high barrier is the entire point. With the current regulations, if the transfer company goes belly up, the state, who would be forced to cover any transfers that were not completed, is not 100% liable for the damages. Customers still get their money moved. The company goes under, but the state isn't left footing the entire bill(like they normally would if the company filed chapter 7). Let's do a thought experiment between the impact of circa 2005 Paypal versus Youtube(pre-Google) going under. Youtube goes down, people lose cat videos. It doesn't really effect anyone's checkbooks, except for the employees and investors of Youtube. Paypal goes under. Accounts that were in the process of getting credited suddenly are never going to get their money. Payments stop, which screws over basically every single user that should have been paid their money. Everyone involved with Paypal, from consumers to investors, is out money, and the states have to step in to make sure that all the accounts are closed out and finalized. There is a seriously high amount of risk for everyone involved. Having a high capital barrier helps to ensure that the risk to the consumer is much less, because they won't be completely screwed out of their money if the company goes under at the wrong time. Also, the taxpayers won't be left footing the bill. Also, I haven't even touched on fraud or money laundering cases. Having these kinds of barriers to entry helps stop most of these kinds of crimes, because it's just too much risk.