Facebook update breakdown:
"Our expenses have dropped dramatically as a result, along with our cash flow requirements."
Rod Zalunardo was replaced. No cash savings there.
Bruce Smith will be replaced and meanwhile MYEC will pay to have CFO duties outsourced. No dramatic cash savings there.
Terminated developers will be used as contractors.
Ed forfeits $55,000 yearly salary.
"Our focus now is launching the GreenPay app in the next weeks, along with activating our customers and preparing for the MyECheck app release."
Hasn't this been the focus for the last few months!? Nothing new there...
"We have also decided to get money transmitter licenses for each state, and register with the Federal Government as a Money Transmitter. This will enable us to offer a broader range of services, the cost is relatively low, but it will take time to register in each state. We our hiring a specialist law firm to do it all for us."
Some digging shows that this is actually needed for the app release and might be the reason why none of the customers are activated.
From Wikipedia:
Internet and mobile-based payment services are also required to seek a state money transmitter license to offer services to individuals residing in the state.
Note that Ed said it will take a while to get licenses. He didn't say "soon".
Forty-eight US states regulate money transmitters although the laws vary from one state to the other. Most of the states require a surety bond with widely ranging amounts from as little as $25,000 to over $1 million and maintaining a minimum capital requirement.
More from Wikipedia:
Money transmitter
In the law code of the United States, a money transmitter or money transfer service is a business entity that provides money transfer services or payment instruments.[1] Money Transmitters in the US are part of a larger group of entities called Money Service Businesses or MSBs.[2] Under federal law, 18 UCS § 1960, businesses are required to register for a Money Transmitter license where their activity falls within the state definition of a money transmitter. [3]
Regulation
Forty-eight US states regulate money transmitters although the laws vary from one state to the other.[4] Most of the states[5] require a surety bond with widely ranging amounts from as little as $25,000 to over $1 million and maintaining a minimum capital requirement. There is an association of state regulators, the Money Transfer Regulators Association (MTRA)[6] that seeks to create uniformity and common practices and efficient and effective regulation of money transmission industry in the United States of America. The MTRA membership consists of state regulatory authorities in charge of regulating money transmitters and sellers of traveler’s checks, money orders, drafts and other money instruments.
The money transmitters themselves have a separate association, the National Money Transmitters Association (NMTA)[7] to have a voice in shaping and developing this industry. A related international association, the International Money Transfer Conferences (IMTF),[8] brings together the money transfer industry once a year for the IMTC Miami conference. In 2012 the IMTC brought together close to 400 participants, 67% from the US.[9]
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department requires MSBs to register.[10] It is also a felony to engage in money transmission without a license in any state that requires a license to operate.[11] Internet and mobile-based payment services are also required to seek a state money transmitter license to offer services to individuals residing in the state.
FINCEN has also ruled that Informal Value Transfer Systems (IVTS) are considered money transmitters for the purpose of registration and licencing.[12] FINCEN defines an ITVS as "any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form". These are known as Hawala in the Middle East, Afghanistan and Pakistan, as "hundi" in India and '"fei ch’ien" in China.
In regulations enacted in 2012 under the Dodd-Frank Act the Consumer Financial Protection Bureau (CFPB)[13] extended its regulation under a "Remittance Rule" that added some additional protection for US consumers who send money electronically to foreign countries.[14] The rule targets any remittance institution defined as consumer-to-consumer transfers of low monetary value, made via money transmitters, banks or credit unions, through wire transfers or automated clearing house (ACH) transactions, to businesses as well as to individuals in foreign countries.
Examples of US money transmitters
MoneyGram
PayPal
Western Union
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