What Payments M&A Activity Can Mean to Your Development Business

The payments space is active with M&A activity. Here are some things to think about if your partner is suddenly part of a new company or acquires a competitive ISV.

payments M&A

Saying that mergers and acquisitions (M&A) activity in the payments space has been active is an understatement. Over the past few years, major U.S. payment processors have merged, resulting in fewer, but bigger companies. Consolidation can result in a number of benefits for the parties involved, as well as for merchants that may gain access to new technologies and have the ability to support additional types of payment transactions.

For ISVs, however, payments M&A activity can mean you get to work one day to find that your payment processing partner is different than the day before. You may even suddenly be linked to a company that you had decided not to partner with for one reason or another. Moreover, you may now be a part of an ISV partner program with a company that offers what you had considered a rival solution.

Regardless of the situation you find yourself in, payments M&A activity raises the question: Stay or go?

Make an Informed Decision

With so much at stake — not the least of which is integrating your software with another payment processing solution — it’s essential to weigh all of your options and make the best decision for your ISV. Ask and answer these five questions following a merger or acquisition:

1. Will the merger or acquisition change the features of the solutions you provide your customers? A payments M&A activity driver is when one or both companies wants to expand their capabilities. Understand the advantages this could offer your ISV.

2. Will the headquarters of the organization change? Your U.S.-based payment processing partner could now be headquartered in a different country. Will that have an impact on your business?

3. Will the new organization handle customer service in the same way? Will you and your customers still receive personalized attention from account reps or will the new enterprise change processes? Will you lose business relationships that you’ve built and need to forge new ones?

4. Will prices change? Payment processing companies can have varied fee structures. Will your customers’ invoices reflect the same types of fees — and the same price?

5. What are your other options? Even if you aren’t convinced that the merger’s pros outweigh the cons, are your alternatives better?

When Payment Companies Expand Their Capabilities beyond Payments

In addition to consolidation among payment processors, payment companies may also choose to acquire a company that expands its capabilities, for example, a payments company may acquire an e-commerce solution that merchants can use to sell online.

This type of acquisition may benefit some partners — it can enable them to offer a broader range of solutions to their customer. But, it can also result in a payments company that’s now competing with its ISV partners, selling the same type of solution that they’ve taken to market.

Although there’s no way to guarantee you’ll never be in this position, making smart choices when you enter into partnerships can help to avoid it. ISVs routinely evaluate potential payment processing partners for their solutions, customer service, expertise in their clients’ industry, and competitive, transparent pricing.

But there’s one more thing to add to that list — their commitment to their ISV community. You want to form partnerships with companies that aren’t only interested about their own growth, but that are also committed to protecting the relationships they’ve built that helped them get to where they are.

The terms of a payment processor’s ISV partner program and the resources that they’ve dedicated to it, such as dedicated account representatives, integration resources, and sales and customer service assistance, will reveal the payment company’s level of commitment to its ISV partners.

The onus is also on you to stay informed about industry news and rumors of payments M&A activity. Also, before entering into a partnership, you should also learn about a company’s past and everything you can about where they’re headed in the future.

Forming a partnership with a payment processor and integrating payments with your solution represents a significant investment of time and potential changes to your client’s user experience. Changing payment processing partners is not something you want to repeat often. Choose partners wisely. 


EVO Payments provides secure, reliable EMV payment integrations to the POS market. Our experienced developer support team makes sure your solution gets integrated and to market quickly and successfully. Sterling has more than 400 ISV integrations, provides international opportunities, and has lucrative partner referral programs.