Bitcoin is growing up and any businesses that interact directly with standard financial layers will have to play by the rules. However the market is growing.. Say they have a very minor amount of success and get a few regular users, maybe 500 users doing $400 per month average, then that is $8 - $12k ($200k * 4-6%) in revenue per month. So the $5k isn't that large in the scheme of things. Eventually, many years out, if bitcoin is successful many more businesses will realize they can simply accept bitcoin directly, cutting out the fiat stage as well as the more explicit regulation (I think they will still try to regulate bitcoin, but it will be much much harder).
I agree in the grand scheme 5k is a drop in the bucket if this becomes a successful business and for bitcoin's sake I hope it does. However, Google's keyword tool shows 0 global searches for anything having to do with Bitcoin and Billpay. Plus in the current state of the market everyone is trying to figure out how to get money into bitcoin rather then out of it and those with coins seem to want to hold on to them for a while. Of course that will change over time.
But with that in mind I was looking at the service from a minimum viable product standpoint. Put up a simple website and process the orders manually for a while. Get a feel for the demand, figure out the sweet spot for fees, how much it costs to regularly cycle money in and out of the exchanges, and get the word out about the service without making much of an upfront investment. Of course none of this is possible if you have to drop 5k just to (legally) process your first payment.
Furthermore, in my brief bit of research some states (such as New York) require you to get licensed in there state as well if you want to operate as a money transfer business with their citizens. Then there's the Federal AML requirements you have to comply with.
