Square Fined $507,000 by Florida Regulators

Mobile payments provider Square Inc. faces fines of $507,000 from Florida regulators for operating in the state without a money transmitter license.

In a July 24 order, the Florida Office of Financial Regulation says Square has operated as a money transmitter in the state since February 2010 but did not apply for a license until Nov. 13, 2012.

“Specifically the Office finds that [Square’s] existing payment processing services including Square Register and stored value/prepaid access card services required a license under Florida law,” the regulator says.

Square did not admit any wrongdoing as part of the consent agreement.

The order was first reported by the South Florida Business Journal. Square spokesman Aaron Zamost did not immediately respond to messages sent by email and Twitter.

"We worked with Florida to resolve our application and receive our license to operate as a money transmitter in the state," Zamost told the Business Journal. "We look forward to continuing to help merchants across Florida grow their business with Square."

In January, Illinois regulators sent Square a cease-and-desist letter ordering the mobile payments company to stop moving money in the state.

Critics say state money transmitter licensing requirements have become archaic and are inapplicable to emerging business models, in some cases potentially barring or at least slowing entrepreneurial businesses from entering the payments field.

Square launched in 2010 with a mobile card-reading attachment for smartphones and tablets It has updated its offerings to better appeal to larger merchants, including investor Starbucks. It has deployed a cloud-based mobile wallet and is testing an email-based person-to-person payments system called Square Cash.