Payment processors are regulated differently than money transmitters:
The money transmitter definition also provides that “the acceptance and transmission of funds as an integral part of the execution and settlement of a transaction other than the funds transmission itself ... will not cause a person to be a money transmitter.”
[...]
FinCEN has already concluded that a merchant payment processor acting exclusively on behalf of merchants receiving payments for goods and services, rather than on behalf of consumers making payments to merchants, is not a money transmitter.
http://www.quora.com/Does-WePay-have-a-money-transmitter-lic...
Aaron himself says Square isn't a money transmitter:
http://www.quora.com/Square-company/Will-Square-be-subject-t...
Payment processors are regulated differently than money transmitters:
The money transmitter definition also provides that “the acceptance and transmission of funds as an integral part of the execution and settlement of a transaction other than the funds transmission itself ... will not cause a person to be a money transmitter.”
[...]
FinCEN has already concluded that a merchant payment processor acting exclusively on behalf of merchants receiving payments for goods and services, rather than on behalf of consumers making payments to merchants, is not a money transmitter.