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Table of Contents

Lead Story

Loyalty, the currency of choice

Ann Train

News

Industry Update

Disputes rekindled by Financial CHOICE Act

Barcode technology gets digital makeover

Home Depot joins chip-and-PIN protest

Aussie crackdown on card surcharges

Features

FICO pedestal cracking

Acquirer Earnings Roundup: May 2016

Mobile coupon tidal wave

ISOMetrics:
Restaurant patronage on the rise

Views

CFPB targets payday lenders: What's next?

Patti Murphy
ProScribes Inc.

Brexit doesn't mean UK will exit fintech race

David Poole
myPINpad

Will vaping go up in smoke?

Brett Husak
National Bank Services

Education

Street SmartsSM:
Shifting MLS strategies and models

John Tucker
1st Capital Loans LLC

Taking stock at mid-year 2016

Jeff Fortney
Clearent LLC

Five ways to combat attrition effectively

Aaron Nasseh
Finical Inc.

Guide to a successful portfolio acquisition strategy

Adam Hark
MerchantPortfolios.com

Company Profile

Traffic Jamming

New Products

Simple, secure cross-border payments

UP eCommerce Payment Solution
ACI Worldwide Inc.

360-degree solution for chargebacks issues

FPR-360
Chargeback Gurus

Inspiration

Finding opportunity

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

July 11, 2016  •  Issue 16:07:01

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Guide to a successful portfolio acquisition strategy

By Adam Hark

The merchant acquiring industry is evolving at a blistering rate, pivoting away from the traditional model, in which the core product and service offering is just payment processing, and hurtling towards a model where comprehensive, end-to-end business management solutions, usually offered as software-as-a-service (SaaS) platforms, rule the day.

Let me be blunt: the traditional merchant acquiring model has crossed the event-horizon and is well on its way toward non-viability. As such, when parties approach me about acquiring a card processing portfolio, the first question I always ask them is, why?

I ask this because nothing is more important in designing a successful portfolio acquisition strategy than clearly understanding the client's objective with the acquisition. And given that the acquiring industry is undergoing convulsionary change, it stands to reason that past drivers for merchant portfolio acquisitions aren't necessarily guides for market activity today.

Common scenarios driving portfolio acquisition

So what's driving the interest in portfolio acquisitions right now? What strategies are being employed? Let's take a look at three of the most common scenarios in today's marketplace.

Desired outcome determines strategy

What I appreciate most about the preceding strategies is that they all make sense. There's an undeniable logic to the acquisition strategies because each strategy is constructed after the objective of the acquisition has been determined. As a direct result, there's a high probability of a successful outcome. And thus, the key to a successful portfolio acquisition strategy is to work backward from the desired outcome.

That being said, the execution of these strategies isn't nearly as easy as it may appear, especially as it relates to the identification of the target acquisitions, but execution is another story altogether.

Adam Hark is co-founder of MerchantPortfolios.com, a dba of Preston Todd Advisors Inc. With over a decade of experience in the payments industry, Adam specializes in mergers and acquisitions, growth and exit strategies, and asset and enterprise valuation for payment processing and payment technology companies. He can be reached at adam@merchantportfolios.com or 617-340-8779.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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USAePay | Impact Paysystems | Electronic Merchant Systems | Inovio | Board Studios, Inc.