Page 33 - gs140502
P. 33
Views
the company's operations, processes, standards, etc. Each It is common, particularly in
aspect of your business – including the products you offer,
the way you manage risk, specific duties of employees, an entrepreneurial industry
reports and audits you conduct, the way you enter into
affinity relationships, and the way you issue stock, where companies grow both
ownership or bonus payments – must be understood, organically and acquisitively, to
qualified and quantified, and then balanced against the
requirements laid out in the act. have various sets of standards and
It is common, particularly in an entrepreneurial industry practices applied depending on a
where companies grow both organically and acquisitively, variety of factors. You may have
to have various sets of standards and practices applied
depending on a variety of factors. You may have different different ways of handling the
ways of handling the parts of your merchant portfolio that
you bought versus the parts you boarded yourself. Many parts of your merchant portfolio
organizations apply differing pricing schemes based on that you bought versus the parts
aspects such as merchant type and risk, as well as on buy
rates for agents versus direct employees and on different you boarded yourself.
services and technologies deployed.
Additional portfolio management variances occur with The original purpose of the MALPB Act was to serve
regard to onboarding, rate and funding structure, risk as a jobs bill for the state of Georgia; the Banking
management, and merchant support based on merchant Department will likely strongly scrutinize any out-of-
type, the company's sponsor bank relationship(s), its agent state applications. But this could be huge for small ISOs
and channel relationships, and on portfolio ownership and acquirers seeking to grow their businesses and not be
and portability rights. Each of these aspects, and others beholden to buy rates and oversight from sponsor banks.
that may apply to your business, must be assessed and Again, careful assessment of each piece of the whole – be
defined in a way that a third party, that is, the Georgia it parts of one organization or parts of a number of smaller
Banking Department, can measure and understand. organizations banding together – must be taken before
Product offerings may be at issue applying for MALPB status.
Another area to consider while conducting an internal Each organization, based on its assessment, will have
operational assessment relates to product and service unique areas to assess and will have a different tactical
offerings. For example, the MALPB Act defines the plan for applying for a MALPB charter. This article is not
activities that MALPBs may conduct as those relating to exhaustive. It is meant to frame the question of whether
merchant acquiring and settlement. The act prohibits any seeking a charter is timely and appropriate for your
type of activity that could be considered "lending." organization in terms of how it will affect your business
operations.
Organizations that offer cash advance, merchant loans
and money transfers must pay particular attention to the I welcome your thoughts on whether you think the MALPB
aspects of the act that prohibit certain activities in this Act is a positive development for the payments industry.
realm, and, as a result of their internal assessments, they It's trite but true – people don't plan to fail; they fail to
may realize the need to create distinct divisions of their plan. So before you decide about MALPB, acquire all the
organization that can offer these services separately from information you need – what lies within your organization
the MALPB itself. as well as what is in the body of the act.
In some of its gray areas, the act addresses businesses Cynthia Bailey is the CEO and co-founder of The Idea People, a full-
based outside Georgia that have corporate partnerships service management consultancy based in Atlanta, Ga. She has over 23
with qualified Georgia companies and the opportunities years' experience in various leadership roles in the payments industry,
for such businesses to piggyback their way into MALPB including most recently as the Vice President of the Payments Practice
status as a result of these partnerships. at management consultancy, Brand Velocity Inc. and, for 14 years previ-
Again, leaving much to interpretation that will ously, as the Chief Marketing Officer for Calpian Inc. and Editor-in-Chief
undoubtedly be decided upon review of an actual court of Transaction World Magazine. Cynthia has put innovative ideas to
case, this provision could present the opportunity for small work in the areas of strategic development, product management,
groups of ISOs that don't, on their own, meet the capital investor and public relations, corporate development, marketing, and
and other requirements of the act to join together under global team management while working with processors, banks, ISOs,
one corporate umbrella for the purposes of the MALPB large billers and retailers. She sits on the Mobile Payments Committee
charter, or to partner with qualified Georgia companies to of the Electronic Transactions Association and can be contacted at cyn-
meet the resident employee provision. thia@ideapeeps.com.
33
the company's operations, processes, standards, etc. Each It is common, particularly in
aspect of your business – including the products you offer,
the way you manage risk, specific duties of employees, an entrepreneurial industry
reports and audits you conduct, the way you enter into
affinity relationships, and the way you issue stock, where companies grow both
ownership or bonus payments – must be understood, organically and acquisitively, to
qualified and quantified, and then balanced against the
requirements laid out in the act. have various sets of standards and
It is common, particularly in an entrepreneurial industry practices applied depending on a
where companies grow both organically and acquisitively, variety of factors. You may have
to have various sets of standards and practices applied
depending on a variety of factors. You may have different different ways of handling the
ways of handling the parts of your merchant portfolio that
you bought versus the parts you boarded yourself. Many parts of your merchant portfolio
organizations apply differing pricing schemes based on that you bought versus the parts
aspects such as merchant type and risk, as well as on buy
rates for agents versus direct employees and on different you boarded yourself.
services and technologies deployed.
Additional portfolio management variances occur with The original purpose of the MALPB Act was to serve
regard to onboarding, rate and funding structure, risk as a jobs bill for the state of Georgia; the Banking
management, and merchant support based on merchant Department will likely strongly scrutinize any out-of-
type, the company's sponsor bank relationship(s), its agent state applications. But this could be huge for small ISOs
and channel relationships, and on portfolio ownership and acquirers seeking to grow their businesses and not be
and portability rights. Each of these aspects, and others beholden to buy rates and oversight from sponsor banks.
that may apply to your business, must be assessed and Again, careful assessment of each piece of the whole – be
defined in a way that a third party, that is, the Georgia it parts of one organization or parts of a number of smaller
Banking Department, can measure and understand. organizations banding together – must be taken before
Product offerings may be at issue applying for MALPB status.
Another area to consider while conducting an internal Each organization, based on its assessment, will have
operational assessment relates to product and service unique areas to assess and will have a different tactical
offerings. For example, the MALPB Act defines the plan for applying for a MALPB charter. This article is not
activities that MALPBs may conduct as those relating to exhaustive. It is meant to frame the question of whether
merchant acquiring and settlement. The act prohibits any seeking a charter is timely and appropriate for your
type of activity that could be considered "lending." organization in terms of how it will affect your business
operations.
Organizations that offer cash advance, merchant loans
and money transfers must pay particular attention to the I welcome your thoughts on whether you think the MALPB
aspects of the act that prohibit certain activities in this Act is a positive development for the payments industry.
realm, and, as a result of their internal assessments, they It's trite but true – people don't plan to fail; they fail to
may realize the need to create distinct divisions of their plan. So before you decide about MALPB, acquire all the
organization that can offer these services separately from information you need – what lies within your organization
the MALPB itself. as well as what is in the body of the act.
In some of its gray areas, the act addresses businesses Cynthia Bailey is the CEO and co-founder of The Idea People, a full-
based outside Georgia that have corporate partnerships service management consultancy based in Atlanta, Ga. She has over 23
with qualified Georgia companies and the opportunities years' experience in various leadership roles in the payments industry,
for such businesses to piggyback their way into MALPB including most recently as the Vice President of the Payments Practice
status as a result of these partnerships. at management consultancy, Brand Velocity Inc. and, for 14 years previ-
Again, leaving much to interpretation that will ously, as the Chief Marketing Officer for Calpian Inc. and Editor-in-Chief
undoubtedly be decided upon review of an actual court of Transaction World Magazine. Cynthia has put innovative ideas to
case, this provision could present the opportunity for small work in the areas of strategic development, product management,
groups of ISOs that don't, on their own, meet the capital investor and public relations, corporate development, marketing, and
and other requirements of the act to join together under global team management while working with processors, banks, ISOs,
one corporate umbrella for the purposes of the MALPB large billers and retailers. She sits on the Mobile Payments Committee
charter, or to partner with qualified Georgia companies to of the Electronic Transactions Association and can be contacted at cyn-
meet the resident employee provision. thia@ideapeeps.com.
33
