What payments due diligence misses: five things that move the price after heads of terms

Heads of terms on a payments business are often agreed on the strength of the revenue line and a management presentation. The price then moves, sometimes sharply, as the payments-specific questions are answered. None of the issues below is unusual. What makes them expensive is finding them late.

1. Safeguarding that works in practice but not on paper

Many firms safeguard client funds correctly day to day but cannot evidence it cleanly: reconciliations held in spreadsheets, breaks resolved informally, or audit findings that were closed without a clear record. In the UK, the FCA's safeguarding regime has raised expectations further. A buyer who finds this late will usually ask for remediation before completion, a price reduction or specific protection in the contract.

2. Scheme and sponsor obligations nobody has read recently

Card scheme rules, BIN sponsorship agreements and processor contracts often contain obligations that change on a sale: notification, consent, re-approval or new capital and collateral requirements. Some allow the counterparty to terminate on a change of control. These documents are rarely in the first data room request.

3. Partner consents that are assumed, not confirmed

Safeguarding banks, correspondents and key distribution partners can all decide not to continue under new ownership. Sellers often assume they will. Buyers should ask early which relationships require consent, which have been sounded out and what the business would look like if one of them declined.

4. Revenue that is more concentrated than it looks

A business with hundreds of clients can still earn most of its margin from a handful of them, sometimes in a single sector that carries scheme, banking or regulatory risk. Analysing gross margin by client, sector and corridor, after scheme, banking and partner costs, often tells a different story from headline revenue.

5. Key people who hold the licence together

In smaller payments firms, a few individuals often hold the regulatory relationships, the scheme knowledge and the largest clients. If the MLRO, a senior manager or the founder who manages the bank relationships is likely to leave after completion, the business a buyer is acquiring is different from the one presented.

How to find these earlier

• Add a payments-specific workstream to due diligence from the start, not after heads of terms.
• Request safeguarding reconciliations, scheme and sponsor agreements and partner contracts in the first data room list.
• Map every counterparty that could end the business, and ask which have been approached.
• Analyse margin by client, sector and corridor rather than relying on revenue.
• Agree retention and handover plans for key people before signing.

For sellers, the same list is a preparation plan. See what buyers check before they make an offer.

This article is general information, reviewed in October 2026. It is not legal, regulatory, tax or financial advice. For regulated corporate finance and legal matters, 7 Seas Consultants works alongside your authorised advisers, who remain responsible for that advice.

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