Strategic Advisory in Payments
& Payments Technology

Buying A Merchant Processing Portfolio The “Professional Class” Of Buyers

As an M & A consultant in the electronic payments space, I can tell you that the single most frequent inquiry I receive by phone or email is a new buyer looking to make a merchant portfolio or merchant residual acquisition. To the outsider, this may hardly seem like a problem as you may imagine this to mean a lot of potential commissions in my pocket. However, that’s hardly the case. Why? This is a niche industry. These are unique assets. And unless you know what you’re doing (as a buyer), you’re likelihood of realizing a successful outcome (i.e. an actual acquisition) is very low.

There’s a reason why the payments processing space attracts so much interest from investors. Predictable, recurring revenue will do that. However, what differentiates the real players, the ones who actually make acquisitions, and the ‘want to be’ players, is experience. For all those interested in jumping in the merchant processing acquisition’s game, take note. There’s a professional class of buyers out there and you’d be wise to make sure you’re capable of going head-to-head with them in competing for these types of acquisition opportunities.

The professional class of buyers have their funding in place and they have the acquisition process down pat. What this amounts to is an ability to evaluate the opportunity, make an offer, negotiate the terms of purchase, and close the deal in a very short time. To a seller of a merchant processing portfolio or merchant processing residual, this translates into ‘money in my pocket’ quickly.

To put it another way, speed kills (the competing bidders anyway). A buyer must have all their proverbial ‘ducks in a row’ to successfully execute an acquisition initiative in the merchant processing portfolio market.