Fiserv Processes First Card-Based Payment Transactions Under Special Bank Charter

The Georgia Department of Banking and Finance said Wednesday (April 30) that Fiserv merchant acquirer limited purpose bank (MALPB) has become the nation’s first chartered MALPB to process card-based payment transactions.

The department said in a press release that the wholly owned subsidiary of Fiserv had its charter application approved by the Department on Sept. 27, received its permit to begin business from the Department on April 11 and processed the first payment transactions under its MALPB charter on Wednesday.

The Merchant Acquirer Limited Purpose Bank Act, which became law in Georgia in 2012, created an optional bank charter for merchant acquirers that provides direct access to the payment card networks without having to contract with a third-party bank sponsor, according to the release.

Georgia Governor Brian P. Kemp said in the release that the step taken by Fiserv MALPB Wednesday enables it and other companies to expand and keeps Georgia “the No. 1 state for processing payments.”

“As the first-of-its-kind bank charter in the nation, this milestone also reinforces Georgia’s position as the leader in innovation when it comes to financial transactions,” Kemp said.

Kevin Hagler, commissioner of Georgia’s Department of Banking and Finance, said in the release: “The issuance of MALPB charters along with the Department’s robust regulatory oversight will help strengthen the vibrant and diverse economy of this state by permitting the safe and sound growth of this critical industry to Georgia.”

The ability to process payments directly, without a sponsoring bank, allows the acquirer to have a more significant financial stake in processing debit and credit card transactions for merchants, as it saves money on the bank fees that would be paid to banking partners, PYMNTS reported April 8.

PYMNTS reported April 4 that Stripe’s application for an MALPB charter was accepted by the Georgia Department of Banking and Finance and that the firm said the charter will allow it to broaden its payment processing offerings.

A Stripe spokesperson told PYMNTS that “over the past few years, as Stripe’s business has grown, we’ve significantly expanded the number of banking and other partners we work with,” adding that the Georgia MALPB is a step that “follows in this strategic direction.”