Mobile payments startup Square has apparently run afoul of the Illinois Department of Financial & Professional Regulation.
In a cease and desist order sent to Square, the Illinois department says that Square is “engaged in the business of transmitting money in Illinois, as defined by the Act, without the required license.”
The “act” that they refer to is the state’s “Transmitters of Money Act,” which says that:
No person may engage in this State in the business of selling or issuing payment instruments, transmitting money, or exchanging, for compensation, payment instruments or money of the United States government or a foreign government to or from money of another government without first obtaining a license under this Act.
The act clarifies that transmitting money means “the transmission of money by any means, including transmissions to or from locations within the United States or to and from locations outside of the United States by payment instrument, facsimile or electronic transfer, or otherwise, and includes bill payment services.”
Square has responded, saying,
“We’ve been in close contact with the Illinois Division of Financial Institutions for several months and are addressing their concerns.”
Far from an expert in legal affairs, I won’t attempt to make any additional comments about the order other than the fact that it looks like Square simply needs to obtain a license.