Scope of Permitted Activities
The MSB license authorizes defined money services activities within scope and subject to conditions. This page sets out permitted activities, conditional activities, and prohibited activity boundaries commonly reviewed by banks and counterparties.
Scope overview
Scope is the single most important due diligence factor for MSB licensing. If your operational reality exceeds your licensed scope—or your marketing implies banking or deposit-taking—counterparty onboarding will typically fail.
Permitted
Activities that may be authorized under MSB licensing subject to controls and reporting.
Conditional
Activities that may require additional safeguards, structure constraints, or enhanced controls.
Prohibited
Activities excluded from MSB scope, including deposit-taking and banking representations.
Operational reality test
Your application must describe transaction flows, corridors, customer types, and counterparties consistently across: business plan, compliance programme, systems description, safeguarding narrative, and disclosures.
Activity scope table
The table below is an illustrative scope map used for clarity of authorization. Conditions may apply based on risk profile and structure.
| Activity | Status | Conditions / limitations |
|---|---|---|
| Money transmission / remittance (cross-border) | ✔ Permitted | AML monitoring, sanctions screening, and auditable records required; corridor risk must be documented. |
| Domestic transfers (where applicable) | ✔ Permitted | Customer due diligence and monitoring proportional to transaction size, frequency, and customer segment. |
| Foreign exchange services | ✔ Permitted | Pricing disclosure, audit logs, and complaints handling controls expected; ensure FX aligns to payment use-case. |
| Payment processing / merchant settlement | ✔ Permitted | Safeguarding and reconciliation discipline expected; acquirer/aggregator model must be described clearly. |
| Stored value / e-wallet (custodial funds) | ● Conditional | May require enhanced safeguarding, governance, and transaction monitoring; structure and custody model assessed. |
| Agent networks / sub-agent distribution | ● Conditional | Agent oversight programme expected; onboarding standards, training, monitoring, and audit rights required. |
| Deposit-taking / interest-bearing accounts | ✖ Not permitted | Excluded from MSB scope; do not represent MSB authorization as banking. |
| Lending / credit issuance | ✖ Not permitted | Not within MSB licensing category unless separately authorized under an applicable framework. |
Prohibited scope representations
Most counterparty concerns originate from misrepresentation—especially claims that blur MSB authorization into banking. The points below are common red flags.
Common red flags
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“Banking services” languageAny public claims implying deposit accounts or banking products.
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Unclear custody modelNot explaining where funds sit and how safeguarding works.
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Unexplained corridorsHigh-risk geographies without risk rationale and controls.
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Policy-only compliancePolicies without evidence of implementation and monitoring.
Mitigation expectations
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Scope mapped to flowsFlow diagrams and transaction narratives consistent across documents.
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Disclosures alignedTerms and customer disclosures match actual product behavior and limitations.
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Safeguarding evidencedSegregation/reconciliation approach stated and supported by controls.
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Monitoring program realRules, alerts, investigations, and escalation procedures documented.
Scope mismatch is a licensing risk
Operating beyond scope, or advertising beyond scope, can trigger supervisory scrutiny and administrative action. Ensure your public materials and onboarding documentation reflect the licensed activity set precisely.
How to select scope in an application
Applicants should select scope based on the smallest truthful description of operations—then expand only where controls and governance can support it. Over-broad scope claims tend to increase onboarding friction and supervisory scrutiny.
Start with product reality
Describe what customers do, how money moves, and where funds are held during each step.
Map corridors and counterparties
Identify countries, partners, processors, and settlement banks relevant to the flow.
Align controls
Demonstrate AML monitoring and safeguarding controls that match the risk profile and scale.
Next step
Use the Application Guidance channel to obtain the current checklist and recommended scope mapping template for MSB submissions.