How to Move Data to a New Payment Platform During the M&A Process

Data portability is a critical issue in 2022 if you are accepting credit and debit cards at your business. In this day and age, it’s become a necessity. It’s all about freely being able to migrate your data to the payment platform of your choice — without being punished, penalized or unnecessarily inconvenienced.

It’s important to note that even in the best-case scenario, migrating credit/debit card data is challenging, as there are many payment card industry (PCI) standards that need to be strictly followed in order to stay in compliance while simultaneously ensuring the safety of cardholder data.

During mergers and acquisitions, both buyers and sellers know that the process of successfully closing a transaction takes on a life of its own. In many cases, it is an emotional and arduous task, as the due diligence process is thorough and demanding; there are many boxes that need to be checked off along the way. As both parties drive down the field with the goal of successfully closing the transaction, there are many operational aspects of the business that need to be considered to ensure a smooth transition from the seller to the buyer.

Ideally, you should initiate the secure and PCI compliant credit card data process several weeks prior to migration. The timing of this is important, as the different payment/gateway vendors each operate in a silo, adhering to their internal company policies and procedures. What may take a week with one provider could take three weeks with another. It can be tricky, so plan ahead and avoid putting the “cart before the horse.” Getting the ball rolling early helps streamline the transition once the transaction closes.

Consider executing a simple non-disclosure agreement (NDA) with your payment provider to help ease the sensitivity and confidentiality of the proposed transaction. This will enable you to speak more openly with your vendors during the process. Keep in mind that if this process is initiated correctly and the acquisition falls through, no harm is done, as payments will continue to flow seamlessly without disruption. The new processing/gateway accounts are set up on the sidelines with no changes made until both the seller and buyer provide the official instructions to do so.

It’s all about timing, but it’s critical to conduct a thorough analysis as a first step. It’s also imperative to understand the seller’s current payment landscape so you can determine next steps and preempt potential curveballs or security concerns that need to be factored into the transition.

A detailed checklist will not only help you stay on track but can help you uncover unexpected issues or scenarios that sometimes present themselves in this process. Knowing what you’re up against at the beginning of the process allows you to plan more efficiently to remedy any uncovered issues. The last thing either party wants is to be blindsided on the “one-yard line” of closing your transaction.

Transfers are often complicated by having to obtain multiple permissions from the different owners and/or employees who helped establish the original payment accounts years back but no longer work there. This process will require an explanation and proof of ownership — which isn’t the problem, per se. But it becomes a problem when it takes three weeks to hear back from the big business processor/gateway company when the signers and/or account owners don’t match up. This can easily be avoided by following a thorough checklist from the start.

So, what about the mechanics of data portability and the potential risks associated with migration from seller to buyer? What issues do you need to be aware of to ensure a seamless migration when and if the time comes? As with anything else in life, you must be prepared before you pull the trigger. The following are some considerations you need to make:

• Plan — As they say, this is not “rocket science,” but planning can go a long way toward making a payment data migration go smoothly, on time and as planned. It does not have to be complicated. A simple plan can be the difference between a big headache and a well-orchestrated migration. The plan is all about an efficient acquisition process that helps transition the company post transaction.
• The steps — You may be thinking, “What the heck do I know about data migration?” If your answer is “not much,” seek assistance in creating a checklist that is simple, easy to read and easy to deploy. The result will be a thorough data migration effort. This is key for securely transferring your customers’ credit/debit card data to a new platform.
• Timing — Address the issue of timing, including but not limited to how different processors/gateways differ in their procedures — which translates directly to how long it takes to complete specific tasks. Understand up front any potential weak points, what they are, what it means to you and the new payment provider, who controls the timing, etc.
• Technical and compatibility scenarios — Yes, it is fair to say there are a lot of moving parts and pieces when it comes to migrating data between old and new payment processing platforms. As you can imagine, there are differences between payment platforms, ranging from benign to substantial. If you’ve ever imported an Excel spreadsheet into a database, you have a sense of what this is like. You must get your house in order before the import properly goes through. Getting the data moved is important; getting it moved correctly is critical. The migration process is similar, with a lot of moving parts. You can get it done correctly the first time.
• Unfair advantage — It’s no stretch to say that the differences among payment vendors is as diverse as the payment platforms themselves. Frankly, not everyone in the payments space has the same amount of experience or know-how when it comes to payments, much less the data migration process itself. There are plenty of payment providers in our space that have little or no technical know-how when it comes to the actual data migration. On the other hand, there are professional payment providers who service the heating fuels industry that are knowledgeable, so it runs the full gamut — par for the course for any industry.