Finding payments targets with the permissions a strategy needs

By Joash Boyton, founder, owner and CEO of Acquiry

Sponsored educational article by Acquiry.

A payments acquisition search should begin with the activity the buyer wants to perform, not a list of companies carrying a convenient sector label. A processor, a software gateway and a business providing services through a banking partner may all appear in the same market map. They can nevertheless offer very different routes to the buyer's objective. Revenue, transaction volume and product demonstrations do not resolve those differences.

The early task is to connect the proposed customer service to an operating entity, geography, regulatory position and set of commercial counterparties. That work can be done before a full diligence process. It does not require the acquisition team to make legal conclusions. It requires a disciplined record of what is known, what is claimed and which questions need qualified review.

This guide offers a permission-led search method built around a practical worksheet. It explains how to use the worksheet to narrow a market map, qualify owner conversations and identify the evidence required before advancing a target. The legal and regulatory questions are for appropriately qualified advisers and, where relevant, the authorities concerned. The commercial decision belongs to the buyer: does the proposed acquisition offer a credible route to the activity it actually needs?

Define the customer activity before choosing the target category

Start with a short service description that a person outside the transaction team could understand. Identify the customer, the problem being solved, the action performed and the proposed location of that service. “Acquire a payments business in Europe” supplies a sector and a broad region. It does not say whether the buyer needs merchant distribution, payment technology, a particular regulated activity or an established operating team.

A more useful description might be: “We want to offer our existing business customers a payment-related service through our product, with clear responsibility for customer contracting, funds handling and support.” This is still incomplete, but it identifies the decisions that matter. The team can now specify what the buyer intends to do itself and what it is comfortable obtaining through partners.

Ask the business sponsor to describe the expected customer journey without regulatory shorthand. Where does the customer begin? Who receives the instruction? Which entity provides the service? Who can see, move or control money or sensitive information? What happens when a transaction fails? A process diagram will often reveal that the buyer is seeking several capabilities rather than one.

Separate the immediate objective from later ambitions. An acquisition that supports the current product may not support a future geography, customer category or funding model. Record expansion plans as distinct use cases. Otherwise, the search may reject a suitable current solution because it lacks an uncertain future capability, or accept a target on the assumption that future expansion will be straightforward.

The first deliverable should be a one-page operating objective, not a company shortlist. Include the intended service, target customers, initial territory, required launch conditions and choices still open to the buyer. Have the commercial sponsor confirm it. When the objective changes, update the document and revisit affected targets rather than quietly changing the standard halfway through the search.

Build the permission-to-objective worksheet

Use one row for each material activity in each relevant jurisdiction. A row should describe a concrete part of the proposed service, not merely repeat “payments”. The worksheet is designed to expose unanswered questions. It is not a legal opinion that a particular authorisation, registration or other arrangement is required or sufficient.

1. Business objective: State the customer outcome and why the acquisition is being considered. Distinguish an essential launch requirement from an optional future enhancement.
2. Activity: Describe what the operating business would actually do. Record the flow of instructions, information and funds where relevant, without deciding legal classifications prematurely.
3. Operating entity: Identify the legal entity expected to contract, deliver the service and hold the relevant relationships. A group brand is not a substitute for an entity map.
4. Geography: Record the location of customers, operations and counterparties, together with any proposed cross-border element. Refer unresolved questions to the appropriate specialists.
5. Claimed position: Record the target's description of its authorisation, registration, exemption, agency or partner model. Label the description as unverified until the supporting evidence is reviewed.
6. Primary evidence: Identify the relevant official register, documents, correspondence or agreements. Preserve the date, exact entity and scope of the evidence rather than recording only a reassuring summary.
7. Counterparty dependency: Identify which banks, networks, processors or other providers make the activity possible and what the target controls directly.
8. Transaction question: Record what the proposed ownership or operating change means for the arrangement, who must assess it and what evidence would resolve the question.

Add a status column with four values: not yet examined, supported for the stated current activity, subject to identified conditions, or inconsistent with the proposed objective. Avoid a generic green status that hides what has actually been checked. A current operating arrangement and the buyer's proposed future arrangement are different propositions.

Give every material row a responsible reviewer. Commercial teams can define intended use; regulatory counsel can address classification and permission questions; technical and operational teams can assess delivery. The worksheet should make those responsibilities visible. It should not encourage one generalist to certify issues outside their competence.

Keep an evidence date and next review trigger. A later change to the transaction structure, service scope or target entity may make an earlier conclusion incomplete. A useful worksheet therefore records the conditions under which the assessment was made, not just the conclusion reached at one meeting.

Distinguish the brand from the entities and territories

A well-known trading name can cover several legal entities and operating arrangements. During initial screening, ask which entity earns the relevant revenue, signs the customer contract and holds the documents that support the claimed regulatory position. Then identify where the necessary people, technology and supplier agreements sit. These answers may not all point to the same company.

For a whole-company acquisition, determine whether essential services are supplied by another group entity that would remain outside the deal. For a product or asset acquisition, ask which elements of the existing operating model are actually within the proposed perimeter. The point is to discover dependencies early, not to choose an asset or share structure without legal and tax advice.

Use a simple entity schedule with five fields: legal name, trading role, country of establishment, relevant activity and evidence owner. At the research stage, collect only information necessary to establish the structure. More sensitive records can follow through an agreed diligence process. Do not distribute organisational or personal information merely because it appears in a large data export.

Geographic reach deserves the same precision. A multilingual website, international customer list or partner announcement is not enough to establish the buyer's intended operating reach. Ask what service is provided in each country, through which entity and under which arrangement. Keep customer location separate from the location of the target's staff or servers.

When a territory is essential to the acquisition rationale, make its evidence a search gate. When it is optional, treat it as a separate opportunity for review. This prevents a broad phrase such as “international platform” from carrying more weight than the underlying arrangements justify. It also allows a target with a narrower but well-supported footprint to be assessed fairly.

Use primary regulatory evidence without overreading it

For a UK search, the Financial Conduct Authority's public register and its official payment-services and change-in-control guidance are primary starting points. They help the team identify the relevant firm and the questions that need examination. The exact applicability of a regime, permission or transaction requirement should be assessed by qualified advisers against the proposed facts.

A register entry should be captured with its date, entity identifier and relevant details. Ask the reviewer to distinguish what the entry establishes from what still requires further evidence. The existence of a firm on a register is not a complete answer to whether it can undertake every activity proposed by an acquirer.

Where the target describes a restriction, condition, exemption or special arrangement, request the documents needed to understand that description. Do not convert a management summary into a definitive legal conclusion. Equally, do not treat a missing document as proof that the arrangement is invalid. Mark the uncertainty and assign the next verification step.

The same method applies outside the UK, but the source must change. Identify the relevant authority and official materials for the jurisdiction rather than assuming one regulator's terminology or process applies elsewhere. If several authorities may be relevant, record the scope of each review. A single country label can conceal multiple questions about activity, entity and customer location.

Ask advisers to explain conclusions in operational terms. Which part of the buyer's proposed service is supported? What conditions or limitations matter? Which assumptions would change the answer? What must be resolved before the team can rely on that conclusion? A short, qualified answer tied to a specific use case is more useful for search decisions than an unqualified statement that the target is “fully licensed”.

Finally, keep the acquisition thesis separate from the regulatory assessment. A favourable legal conclusion does not establish commercial fit. It only resolves one part of the decision. The buyer still needs the product, customers, people and operating capability required to use the arrangement effectively.

Map the counterparties that make the service work

Payments businesses can depend on a network of commercial relationships. The search team should identify those dependencies without assuming that any particular model is better. A partner-supported business may fit a buyer's strategy well. A more directly controlled model may offer advantages but bring responsibilities the buyer does not want to assume.

Create a counterparty schedule linked to the activity worksheet. For each important service, record the provider, contracting entity, function performed, operational reliance and relevant document owner. Ask which relationships are essential to current delivery and which could be replaced. Keep the answer evidence-based: the existence of alternative providers does not establish that switching would be quick or commercially equivalent.

Useful questions include whether a relationship supports the desired customer categories, territories and transaction patterns; how operational issues are escalated; which terms require review in the proposed transaction; and whether the buyer's intended changes affect the commercial arrangement. Contractual interpretation and consent questions should be examined by counsel, with direct counterparty engagement staged appropriately.

Do not make informal approaches to a target's counterparties without agreement. Premature enquiries can reveal the target's identity or a confidential transaction. The early worksheet can identify a question and the evidence required without authorising anyone to contact the relevant bank, processor or customer. Communication ownership should be explicit.

For a material dependency, ask for a continuity explanation. If service were disrupted, what would the target do, which customers would be affected and what resources would be needed? This is an operational discussion, not a demand that every provider be instantly replaceable. It helps the buyer understand the practical significance of concentration.

A useful search result may therefore be more nuanced than “has the required permission”. It may be: “The proposed activity appears relevant, subject to specialist confirmation and a particular partner arrangement that needs review.” That formulation gives the acquisition team an actionable next step while preserving uncertainty.

Connect the operating model to revenue quality

Once the activity and dependencies are understood, revisit the financial summary. Ask which services generate revenue, which entity records it and which counterparties influence the economics. A large volume figure may describe activity passing through a system, while the target's commercial return depends on a narrower fee or service arrangement. Define each metric before using it to compare targets.

Request a bridge between the business description and its revenue categories. Separate the main products, customer types and contractual sources of income. Ask whether reported categories are consistent across periods and whether changes in presentation explain apparent growth. Accounting advisers should assess the relevant financial reporting; the search team's immediate purpose is to understand the economic model.

Examine concentration at the level that matters. A target may have many customers but depend on a single distribution relationship. It may have several counterparties while one supports the activity the buyer most wants. A company-wide percentage can obscure concentration within the specific service being acquired.

Review the work needed to sustain those revenues. Which activities require onboarding, monitoring, support, dispute handling or technical maintenance? How does the target describe responsibilities between itself and its providers? A revenue line cannot establish whether the buyer can operate the service at the intended scale. The staffing and operating model need to be considered alongside the commercial opportunity.

Do not turn an early revenue review into a valuation offer. At this stage, the output is a set of supported business-model observations and unresolved questions. It may justify continuing the search, changing the target profile or examining an alternative route. It does not establish what an acquisition should be worth.

Review the proposed transaction rather than an abstract acquisition

Regulatory and commercial questions become more useful when the team can describe a plausible transaction. Which entity or assets might be acquired? Who would own and control them? What would remain unchanged at completion, and what operating changes are contemplated later? Advisers need those facts to assess the relevant requirements.

Maintain a transaction assumptions sheet separate from the target facts. This avoids confusing a seller's current business with the buyer's plan. Include the contemplated perimeter, ownership structure, intended management arrangements, immediate service scope and potential later integration. Mark unresolved choices rather than inventing a structure to make the analysis appear complete.

Ask specialists to identify which conclusions depend on those assumptions. If the buyer changes the perimeter or introduces a new operating entity, the review may need to be revisited. The acquisition team should know the trigger rather than treating an earlier discussion as a permanent clearance.

Sequence commercial discussions around the important dependencies. A team can often continue investigating strategic fit while particular legal questions remain open, provided it does not represent them as resolved. Some unknowns may be so central that further work would be wasteful until an initial assessment is available. Make that distinction explicit.

Where notifications, approvals or consents may be relevant, ask the appropriate advisers to identify the process and information needed. Avoid inserting an unsupported timetable into an acquisition plan. The search team can record a dependency and responsible owner without promising when an external party will reach a decision.

This discipline protects both sides from a familiar misunderstanding: the buyer believes it is discussing an immediately usable capability, while the owner is describing a business whose current arrangements depend on facts the buyer intends to change.

Assess the operating team and controls in proportion to the thesis

A permission-led search still needs an operating-capability review. Identify the roles responsible for customer onboarding, oversight, reconciliations, technical reliability, complaints and incident response where those functions are relevant to the target's model. Ask what is performed internally, outsourced or shared with a wider group.

Begin with roles and responsibilities rather than unnecessary personal data. Which functions have documented cover? Where is knowledge concentrated? How are outside providers supervised? Which activities would the buyer have to supply after the transaction? These questions help distinguish a functioning standalone business from a product that depends heavily on its owner's infrastructure.

Ask the target to walk through an ordinary operational exception. How is the issue detected, who makes the decision, what records are kept and how is the customer informed? Use an appropriately anonymised example. The purpose is to understand the process, not to obtain private customer information before there is a justified diligence need.

Test the buyer's growth plan against the operating model. A new customer type or territory can create requirements that are absent from the current business. The acquisition thesis should state which capabilities already exist and which would need to be built or obtained. Do not credit the target with a future operating capability merely because the buyer intends to invest in it.

Keep operating findings separate from regulatory conclusions while allowing them to inform one another. An adviser may identify a requirement, but the buyer must still understand how the business would perform the necessary work. A documented policy and a demonstrated routine answer different questions.

Stage information requests so the search remains workable

Early owner discussions should establish relevance without turning into a full audit. Begin with the target's operating description, entity structure, service scope and high-level dependencies. Explain why each question matters to the buyer's objective. An owner should be able to understand the reason for a request rather than receiving a generic list of every document a transaction might eventually require.

Use three information stages. In the first, establish broad fit through public information and a controlled introductory discussion. In the second, review selected evidence under appropriate confidentiality arrangements. In the third, undertake detailed diligence when the parties have enough alignment to justify the effort. The exact boundaries should be agreed for the situation.

At every stage, ask whether a less sensitive form of evidence can answer the current question. An anonymised customer mix may be enough to assess commercial concentration initially. A description of a counterparty function may reveal a key dependency without disclosing the agreement. Later diligence can test the underlying details with suitable access controls.

Maintain a request register showing the question, document sought, intended reviewer and decision it supports. Close requests when they have been answered. Where evidence is unavailable, record the limitation rather than repeatedly asking for the same item in different wording. This makes the process more respectful and improves the quality of the decision record.

Translate the activity map into searchable target characteristics

A legal or operational requirement becomes useful to an origination team only when it can be translated into a research question. Some characteristics are visible in public material, such as a described product, stated customer segment or published entity details. Others require an owner conversation or specialist documents. The brief should distinguish these sources instead of asking researchers to certify matters they cannot observe.

For every essential activity, identify a preliminary search signal and a later confirmation requirement. A public product description may justify including a company in the research universe. An owner explanation may justify requesting relevant evidence. A qualified review of that evidence may support a more confident conclusion. These steps answer progressively narrower questions; they should not be collapsed into a single yes-or-no database field.

Keep commercial preferences separate from conditions central to the service. A modern interface, established distribution channel or desired customer mix can be important without resolving the operating arrangement. Conversely, a suitable regulatory position does not compensate for a product that serves the wrong customer problem. Write the minimum commercial and operating case side by side so one cannot silently replace the other.

Include explicit exclusion reasons. A target may be outside the agreed territory, offer only a technology component when the buyer needs an operating business, or rely on an arrangement that the proposed acquisition does not include. Record the reason accurately. “Not relevant to this objective” is different from a judgement that the business is unattractive generally.

Allow a conditional research category where the evidence is incomplete but the possible fit is meaningful. Attach the precise question that would determine whether further work is justified. This preserves potentially useful candidates without allowing speculative entries to be described as qualified opportunities. The discipline is especially valuable where public descriptions use broad labels that conceal different business models.

Use a compact screen at the next buyer review

The following blank format can be copied into a working document. Complete it for the proposed operating objective before applying it to individual candidates. Leave unknowns visible rather than filling them with optimistic assumptions.

• Intended service: [Customer, activity, launch territory and immediate commercial objective.]
• Minimum operating model: [Responsibilities the buyer must control and responsibilities it is willing to obtain through partners.]
• Relevant target characteristics: [Product, entity, customer segment, jurisdiction and operational capabilities to research.]
• Evidence required: [Official source, management explanation, agreement or specialist review needed for each material claim.]
• Dependency that could change the decision: [The unresolved permission, counterparty, perimeter or operating question.]
• Next action and owner: [Who will obtain or assess the evidence, and which buyer decision follows.]

Review the screen against the actual objective, not against the most persuasive company presentation. If the buyer has changed its service plan, acknowledge that change first. Otherwise, teams can spend considerable effort defending or rejecting a target using assumptions that no longer reflect the strategy.

Recognise when acquisition research is not the next best step

A target search may be premature if the buyer has not decided what activity it wants to perform or who should perform it. In that situation, a focused operating-design discussion and specialist regulatory assessment may be more useful than expanding the company list. Better search execution cannot resolve an undefined service model.

Similarly, the desired capability may be available through a commercial partnership or a narrower technology arrangement. Compare those routes against the same requirements for customer experience, control, ongoing responsibilities and dependency. Do not assume an acquisition is faster simply because the target already operates. Integration, transaction requirements and changes to existing arrangements still need consideration.

External origination support is most useful once the buyer can state what to investigate and how it will judge the evidence. Regulatory counsel, transaction counsel, accounting specialists and technical reviewers remain responsible for their respective assessments. The search adviser helps create relevant conversations; those conversations do not replace the buyer's decisions or specialist verification.

Work through a hypothetical target comparison

The following example is hypothetical and does not describe a live opportunity. A business-software group wants its domestic customers to accept invoice payments within their existing software workflow. It wants a controlled customer experience and an established operating team for the proposed service, but it is open to using commercial partners. International expansion is a possible later objective, not a launch requirement.

Target A offers a polished payment-acceptance integration and an established merchant base. Its current service relies on a group-level partner agreement outside the proposed product-line acquisition. Target B offers the buyer a whole operating entity, with fewer merchants and a less developed interface, but the entity holds its principal agreements and has a dedicated support team. Neither description establishes that the proposed transaction is feasible.

The worksheet should first map both targets against the same immediate service objective. For Target A, the key question is whether a suitable post-transaction arrangement can be established, on what terms and with what implementation work. For Target B, the team needs to examine whether the product and operating setup can support the buyer's customer experience and intended scale.

Specialists would separately review the relevant regulatory position and transaction questions for each target. Commercial reviewers would assess customer fit and counterparties. Technical reviewers would investigate integration. The buyer should not allow Target A's interface to compensate silently for an unresolved operating dependency, or Target B's apparently clearer perimeter to substitute for product fit.

The team might advance both targets but for different reasons. It could request evidence about Target A's post-transaction partner route while testing Target B's integration effort. If no workable partner route exists within Target A's proposed perimeter, the buyer would need to change that perimeter or stop relying on the target for this objective. If Target B requires integration work beyond the buyer's available capacity, the buyer could revise its implementation plan or pause the search discussion. Neither candidate should advance on the assumption that the transaction itself resolves those dependencies.

The practical benefit of the worksheet is not a numerical winner. It is a clear account of why each candidate remains relevant, which assumptions support that relevance and what evidence would change the decision. That account is more useful than a ranking based on headline revenue and a binary “licensed” field.

Turn the worksheet into search gates and owner conversations

For payments buyers, Acquiry offers target mapping and owner outreach using licence type, jurisdiction and permissions as screening criteria. The permission-led worksheet helps a buyer turn its intended activity into a specific research and discussion brief. The origination role creates relevant owner conversations; it does not replace regulatory counsel's assessment of the proposed service or transaction.

Set three gates. The research gate asks whether a company appears relevant enough to investigate. The dialogue gate asks whether the owner's description and priorities justify a controlled exchange of evidence. The advancement gate asks whether the main dependencies are understood well enough for the next level of commitment. None of these gates should be described as a guarantee of approval or completion.

For each gate, record the minimum evidence, decision owner and unresolved issues that can remain open. Distinguish an issue that prevents progress from one that can be investigated in parallel. This avoids both premature certainty and the opposite problem of demanding complete diligence before any useful conversation.

Prepare an owner agenda around the operating objective, the proposed perimeter and the most important dependencies. Ask how the business works today before presenting the buyer's intended changes. Listen for differences between what the owner wants to transact and what the buyer believes is available. Those differences can matter more than an early discussion of headline financial metrics.

After the meeting, write a short decision note. Include what was confirmed, what remains an assertion, what needs specialist review and the next agreed step. Keep the language neutral. The record should help the team decide what to do, not create an appearance of certainty for an internal presentation.

Questions buyers commonly need to resolve

Should the target list exclude every business that relies on partners?

No automatic exclusion follows from partner dependence. Decide which activities the buyer needs to control directly and which it is willing to obtain through durable commercial arrangements. Then examine the evidence for those arrangements. A partner model may fit the strategy, but its consequences should be explicit.

Is a regulator's register enough for initial screening?

It can be an important primary source for a specific entity, but its significance depends on the question being asked. Record what it supports, identify limitations and have qualified advisers assess the intended activity and transaction. Do not expand a narrow piece of evidence into a broad assurance.

Can the team discuss commercial terms while permission questions remain open?

The appropriate sequence depends on the transaction and advisers' guidance. As a process matter, unresolved dependencies should be visible to the decision-makers. Do not let an indicative commercial discussion create the internal impression that regulatory, contractual or operating questions have already been settled.

How should future geographic expansion affect the search?

Separate essential current territories from possible later ones. Assess each expansion use case on its own facts. A target can be suitable for the immediate objective without supporting every future plan, provided the buyer understands that limitation and does not present the expansion as an established benefit.

What is the most useful output before a full diligence process?

A dated operating objective, entity map, completed worksheet and short issue register. Together, these should explain the service the buyer wants, the evidence behind the target's relevance and the conditions that require further work. The outcome is a better-defined decision, not a substitute for diligence.

About the author: Joash Boyton is the founder, owner and CEO of Acquiry, an international M&A advisory firm based in Melbourne with a core focus on buy-side acquisition origination. More information: acquiry.com.

Sources and further reading

• Fintech M&A: Buy, Sell & Raise Capital in Payments: https://www.acquiry.com/fintech-ma/
• FCA Financial Services Register: https://www.fca.org.uk/firms/financial-services-register
• FCA Change in control: https://www.fca.org.uk/firms/change-control
• FCA Payment Services Regulations 2017 and Electronic Money Regulations 2011: https://www.fca.org.uk/firms/payment-services-regulations-e-money-regulations