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Massachusetts residents used mobile payment platforms like Venmo or CashApp to send or receive more than $31 billion last year and financial regulators at the Division of Banks fear that the public is under the false impression that the activity is regulated and that there are protections for consumers.

Of the 49 states that regulate peer-to-peer money transmission activity, Massachusetts is the only one that does not regulate domestic money transmissions, Division of Banks Commissioner Mary Gallagher said Tuesday. Under current state law, she told the Joint Committee on Financial Services, only transfers to foreign countries are regulated. Gallagher pitched a bill (H 1106) that would establish a single statutory framework for the banking division to license, examine and regulate all money transmitters, foreign and domestic, as well as check sellers in Massachusetts.

“In a state known for strong consumer protections, we suspect that Massachusetts residents may be operating under the false presumption that there’s regulatory oversight and consumer protection for such activity, perhaps thinking that the Federal Reserve or the FDIC has authority. They do not,” Gallagher said.

Cynthia Begin, first deputy commissioner of banks, said the annual volume of consumer money transmission in Massachusetts is “significant” and increasing. In 2022, Massachusetts residents engaged in a total of 195 million transactions exceeding $31 billion transmitted. Domestic money transmission accounted for 88 percent of the number of transactions and 73 percent of the dollar value.

“In other words, our existing regulatory framework – which as you just heard covers only transmission to foreign countries – accounts for just 12 percent of the money transmission transactions in the commonwealth,” Begin said. “Also of note is the sheer volume of transaction growth for domestic money transfers, increasing by 55 percent during a two-year period, 2020 to 2022. This is a real concern to the division as the commonwealth’s financial regulator.”

The Financial Services Committee has reported past versions of the bill out favorably, Gallagher said. She said the core of the legislation filed by House Co-Chair James Murphy is “a modernization effort to bring existing law … which was last updated in 1991 and still represents this technology from the early 1900s, into the 21st century, thereby filling a significant regulatory and consumer protection gap unique to Massachusetts.”