- Key Insight: Checkout.com is seeking a limited bank license in Georgia.
- What's at Stake: Fiserv and Stripe already have similar licenses.
- Forward Look: The license would enable the firm to provide more payment services with less reliance on partners.
Checkout.com is looking to payments hub Atlanta to jolt its U.S. ambitions, opening a local office and seeking regulatory cover for a quick connection to merchants.
The company has applied for a merchant acquirer limited purpose bank, or MALPB, charter in Georgia, which would allow Checkout.com to be its own merchant acquirer. This would reduce the need for bank partners to provide connections to U.S. payment networks for Checkout.com's clients, speeding processing and expanding Checkout.com's service menu.
"This will give us the ability to move much faster, and get to merchants and solve their problems," Jordan Reynolds, the MALPB CEO and head of North American Banking for Checkout.com, told American Banker.
A license to acquire
A merchant acquirer is a bank or regulated financial institution that processes credit and debit card payments, and is a link between a business, payment processor and card issuing bank involved in a transaction. The acquirer is responsible for authorization and settlement risk. An acquirer additionally forms and maintains the merchant accounts that support business payments, assuming risks such as charge-backs, fraud and payment disputes, according to the law firm
That's more duties than a payment processor, which facilitates payments between consumers and businesses and supports transfers between a consumer and business bank account.
But merchant acquiring, while usually performed by a fully regulated bank, is not banking by itself. The Georgia MALPB license does not allow the holder to conduct general banking, including deposit-taking, according to Venable, adding other bank functions such as sponsoring ATMs, issuing payment cards, and making loans are also not permitted.
Obtaining a MALPB license would show potential customers in the U.S. that Checkout.com is more heavily regulated than other fintech-led payment processors, according to Reynolds.
"Not requiring a bank partner streamlines the offering for these providers," Tony DeSanctis, senior director at Cornerstone Advisors, told American Banker. "They can own the end-to-end solution without dealing with a bank partner and its underwriting and risk management criteria."
This could additionally open new payment processing opportunities by removing the need for a bank partner that may not want to be in certain business lines, DeSanctis said. "For example, gambling and other contentious spending categories are easier to manage without a bank partner."
Checkout.com's U.S. business is on the rise. Since entering U.S. merchant acquiring in 2021 (by working through bank partners) the U.S. has grown to represent 15% of the company's total global business. U.S. volumes grew more than 80% in 2024, outpacing every other region, according to the company. "Since we're a European company, we want to demonstrate that we are in the U.S and we're invested here," said Reynolds.
As part of its focus on the U.S., Checkout.com is opening an office in Atlanta, to join other U.S. offices in New York and San Francisco. The company, which has about 2,000 employees, processes about $1 billion in payments daily. Its clients include eBay, Klarna, GE Healthcare and Pinterest. "Being in [
The playing field
The U.S. merchant acquiring market is huge but top-heavy. There are more than 300 merchant acquirers in the U.S., with the largest ten acquirers totaling $10.6 trillion in payment volume in 2024, according to the Strawhecker Group, which reports JPMorganChase, Fiserv, Worldpay, Global Payments and Wells Fargo are the five largest, controlling 60% of the total U.S. market. Fiserv in late 2024 received a MALPB charter in Georgia.
In an earlier interview with
Stripe, which received a MALPB charter in Georgia in August, is in seventh place on Strawhecker's list. Stripe has added new artificial intelligence and stablecoin technology through a
"Merchant acquiring is very competitive so we want to demonstrate that we're here to stay," Reynolds said.
Another opportunity for Checkout.com is the potential to offer embedded banking and payment services to merchants and fintechs, Thad Peterson, a strategic advisor at Datos Insights, told American Banker.
"This is an area of high interest and dramatic growth for retailers and fintechs and demand for services vastly exceeds the supply of financial institutions that offer the capability," Peterson said. "Fiserv is actively pursuing embedded finance after their acquisition of Payfare as is John Henry with its recent acquisition of Victor Technologies."