Payment due diligence

Legal due diligence reads the PSP contracts for liability, assignment and termination. Financial due diligence sees payment costs as one line in the quality of earnings. Commercial and operational due diligence cover the market, the customers and the operating model. None of them measures what the company pays per payment method and market, what share of its payments fails, or what the contracts allow the provider to do once ownership changes. Payment due diligence closes that gap with a workstream of its own, reported in the format the deal team already uses: red flags first, then the numbers for the model.

PSP and acquirer contracts. Change-of-control clauses and assignment, termination rights and fees, exclusivity, minimum volume commitments and shortfall fees, rolling reserves and collateral, the rate annex, the notice period for unilateral price changes, term and automatic renewal, and the allocation of chargebacks and scheme fines. Every clause is quoted and dated.

Cost position. What the company pays per payment method, market and card type, split into interchange, scheme fees and the provider's markup where the contract allows it, set against the benchmark and stated in euros per year. Within the EU, interchange on consumer card payments is capped at 0.2% for debit and 0.3% for credit where both payment service providers are located in the Union. Commercial cards and cards issued outside the Union fall outside those caps, so the card mix decides how much of the cost is negotiable.

Payment performance. Authorisation rate per method and market, the split of declines between issuer, PSP and fraud screening, 3DS outcomes and the use of exemptions such as transaction risk analysis, retry logic, and merchant-initiated transactions for subscriptions and instalments. Failed payments are converted into revenue lost per year. The measurement runs on the company's transaction data; how the integration produces those outcomes is part of the technical due diligence.

Method coverage. The payment methods offered per market, set against what shoppers in each market pay with, from the Retail Payment Methods Transparency Index.

Settlement and cash. Settlement timing per provider and method, reserves and holdbacks held by the acquirer, and the settlement flows per legal entity. Cash held by a provider is relevant to the net debt and working capital definitions in the share purchase agreement.

Change of ownership. Under EU anti-money laundering rules, a provider applies customer due diligence to existing customers when their relevant circumstances change. A new owner means a review of the ownership structure by every PSP and acquirer the company uses, and the documentation for it has to be ready before closing.

Known changes. Exposure to changes already announced, such as the migration from iDEAL to Wero, which the Dutch banks and payment service providers aim to complete by 31 December 2027.

The plan is executed through the existing services: renegotiating PSP costs, a payment RFP where the current provider is not the right one or where two set-ups are consolidated, and Managed Performance Optimisation for the authorisation rate and decline handling. The measurement from the due diligence is the starting point, so no second baseline is needed.

Fixed scope, a term agreed upfront per transaction and a fixed fee. EcomStream works from the data room: the PSP and acquirer contracts with all amendments and rate annexes, settlement reports and transaction-level data for a recent twelve-month period, under the transaction's confidentiality agreement.

The work runs alongside the legal, financial, commercial and technical due diligence workstreams, so that all findings reach the deal team together.

Ramon Helwegen handles every engagement personally, so the person who measures the baseline before signing is the person who executes the plan after closing.