Legislation to clarify a “money transmission” under state law has passed the Legislature and awaits action by the Governor.
The California Chamber of Commerce supports AB 2209 (Dickinson; D-Sacramento), which accommodates use of new technologies and the movement toward online and mobile apps for transmitting funds by updating the Money Transmitters Act.
Supporters believe current law does not apply to situations where one party accepts payment as an agent of the payee and the delivery of funds to the payee’s agent satisfies the payer’s obligation. The clarification in AB 2209 is needed to ensure that “money transmission” does not include the payee’s agents in these types of transactions.
The clarification is critical to companies that operate online marketplaces and other similar services. Many of these marketplaces provide California’s small businesses with the opportunity to reach and sell to a global audience.
AB 2209 will also give consumers the confidence to buy from small companies because the consumers know and trust the marketplace operator. The bill encourages growth as California’s economy continues to recover from the recession.
