Dealing with merchant processor transition

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by a searcher from University of California, Los Angeles - UCLA Anderson School of Management
in Santa Monica, CA, USA

3mos ago

Dealing with merchant processor transition

When you do an asset sale how have you ensured that your merchant processing is handed over smoothly? Do you apply before the deal or get an assignment of the existing contract? I just want to avoid being unable to take credit/debit cards on day one.

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reply by a professional 3mos ago
from American University in Irvine, CA, USA

Hi, Dean. When we represent clients in this situation, we always get a direct assignment of all of the accounts, and the processing agreement, directly in the APA. Your attorney should review the contract carefully, as there are often change of control and consent requirements that can have bearing on your ability to assume them. If you want some help, or to discuss any of these issues in greater detail, feel free to DM me here. Also, if you would like recommendations to other good processing companies that I have worked with.

reply by an intermediary 3mos ago
from The University of Chicago in Chicago, IL, USA

1) The question you asked is very important, but it needs addressing in both the Asset and Stock. 2) There are many more aspects of the deal, not just merchant processing that need addressing like ACH credit/debit, city license, insurance, benefit programs, etc. Most issues are same between Asset and Stock. 3) Trying to get things done pre-closing risks disclosing that the business is for sale to 3rd parties. As M&A broker over 35+ years, we manage this ultra carefully and only with seller approval for timing. Typically, we allow after APA/SPA and other docs have gone through few rounds of review. 4) In almost all cases, seller winds up with cash (e.g. ACH credit goes to seller bank account even if buyer bought A/R). And buyer winds up getting an A/P invoice that was seller responsibility. Lawyers button things up. But the LAST thing you want is lawsuits before you learn employee names. These matters do not become an issue if both sides develop a good relationship during the process.