Mergers & Acquisitions for Electronic Payments
Ensure a smooth and seamless transfer during the sale or merger of your business with Global Legal.
Selling or transferring a business’s credit card portfolio differs slightly but significantly from a standard merger and acquisition situation.
In standard mergers and acquisitions, fixtures and the lease agreement are the main considerations.
But to sell your merchant portfolio, you’ll need a reliable credit card portfolio valuation.
Global Legal’s Areas of Focus
in Mergers & Acquisitions
Credit Card Portfolio Advisement
Smart business owners keep a close eye on their books, tracking profits and losses, employee and customer information, tax details, and more. Organized and thorough documentation helps tell the story of your business, and you’ll need to paint a clear picture when it comes time to sell your payment processing company to ensure you negotiate for all you’re worth.
Having a team of professionals handling your credit card portfolio even before its sale or transfer can relieve your business of one headache. A portfolio advisory service can keep you regularly advised of the value of the accounts under your management and what accounts are delinquent or need attention. As part of a credit card portfolio valuation, expert attorneys can help you see things like a potential buyer might. They’ll consider risk and portfolio management factors like a business’s level of investment risk, its potential for future earnings, and its customer loyalty.
Sell Your Merchant Account
The first step in a successful sale should be to gather documents together. Typically, a potential buyer will want to see at least 12 to 24 months’ worth of residual reports and a copy of your ISO agreement. They’ll also want to take a look at any other contracts you may have with downstream and referral relationships, such as office leases, equipment supplier agreements, employment agreements, revenue-producing contracts, and more. Smart businesses always have copies of these documents at hand, as they’re key to demonstrating your value.
When it comes time for the sale or transfer, the credit card portfolio valuation will be a key part of the purchase agreement. The potential value or estimated value is critical to the valuation of the business as a whole, so having a good evaluator who has been monitoring your portfolio, can describe the movements of your accounts readily, and can vouch for the approximate amount of the portfolio is essential.
Merchant services agreements always spell out where the contract will be litigated if it is contested. This can be important for several reasons. Travel and favorability of the merchant’s home state should be considered, as well as the state’s position on business law and tax laws.
Your attorney should also look for – or will include or exclude when drafting – a clause regarding arbitration. Many companies such as Visa now require mandatory binding arbitration instead of a jury trial in legal disputes. Such a clause may be included in boilerplate contracts, and a good attorney should ask if such a clause can be waived. These aren’t the types of considerations the average business is likely to watch for in a contract, but our lawyers’ expertise keeps us on the watch.
Global Legal Law Firm for Credit Card Portfolio Management
Our attorneys at Global Legal know contract and electronic payment processing law front to back, and we bring decades of experience in credit card valuations. Our expertise in contract review means we understand how to review your sales agreement and integrate your portfolio into the agreement, all while protecting your financial interests. The value of your credit card portfolio will be essential to your business, no matter what the final outcome of your merger, acquisition, or sale. Consult with us to assess your company assets before you make your business combination decisions.