An example of Strategic Choices Analysis related to money transmitter licenses at the state level.

1. Text
PROS
• More control of own licenses.
• No fees paid to partners for operating
under their licenses.
• Does not require personal relationship(s)
with licensed MSB’s.
Money Transmitter Licenses Strategy
SELF APPLICATION
NoveltyLab applies for money
transmitter licenses on its own
AGENCY MODEL
NoveltyLab secures agency
relationship with licensed MSB
CONS
• Takes at least a year and $1MM to secure
licenses in key states.
• It takes $5MM (including bonding) and
over two years to obtain licenses in all
states.
• The process is too slow, when it is critical
to enter the market.
• Requires staff to apply and maintain
licenses.
• Higher degree of dependency on licensed
MSB partner (classic Holdup Problem).
• Assisting potential competitors.
• Millions of dollars paid in fees to partner.
• Possible demand to sign a long term
contract.
• Fastest way to secure licenses in all
states.
• Allows for quickest market entry.
• No upfront investment.
• Access to partner’s complementary
services such as AML/KYC compliance.
• Integration with load/unload channel.