Why Private Equity Firms Are Turning to CMSPI to Optimize Payments Costs

08th December 2017
Alistair Matthewson
Alistair Matthewson
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Managing a varied portfolio of consumer-facing companies presents many unique challenges for private equity firms. Your consumer businesses may consist of a combination of both high and low average transaction values, eCommerce and brick-and-mortar stores, different payment profiles, and a variety of other factors that add an additional level of complexity to optimizing your payments arrangements.

At CMSPI, we are experienced in working with private equity firms and understand the intricacies that make these projects so complex yet rewarding for firms who get them right. Our goals are always aligned with our clients; we focus on driving maximum value from your arrangements and our team regularly achieves substantial seven-figure annual savings for our clients.

Areas of opportunity

As a private equity firm, one of your strongest assets is your size. By maximizing the volume of your consumer-facing portfolio, we can work with you and your vendors to negotiate truly market-leading arrangements for multiple companies in your portfolio. This means many of your smaller-volume businesses will benefit from the economies of scale created by your larger-volume businesses. Card transaction costs can be one of the most substantial financial outgoings for consumer-facing companies, and understanding which elements of those costs are negotiable is a complex task for internal teams.

Our consultants and analysts consider the unique operational requirements of each individual business in your portfolio, and provide granular analysis on a business-by-business basis. Our consultants will help you understand the analysis, and decide on the best course of action out of the options available to you, with all executive control remaining with you at all times.

Many of the fees your in-house team perceive to be fixed may actually be negotiable, and this level of expertise sharing and transparency between businesses will ensure that all areas of your portfolio which can be optimized, are optimized. Generating maximum value for your portfolio, both in the long and short-term, is crucial for any private equity manager. We help our clients implement optimized arrangements up to 3x quicker than internal teams, giving you significant, bottom-line cost savings faster and ensuring the companies in your portfolio maintain a competitive edge over their peers.

Improving your payments solutions in the short-term is important, but our consultants will also work with you to future-proof your arrangements. When negotiating contracts between members with different vendors, terms, and end dates, it is important to align your arrangements as much as possible, and to put your firm in a stronger renegotiating position when these contracts come up for review in the future. Flexible terms such as avoiding penalty fees for early contract termination are key to multi-party arrangements.

Recent work with private equity firms has included: 

Consolidation of five different organisations across a variety of industries Significant ancillary value added with little internal disruption Restructuring of contract term periods to provide alignment across the portfolio
Negotiable card fees exposed Seven-figure annual savings achieved across the portfolio Future-proofed solutions put in place

In summary

The payments landscape is a fast-paced and ever-evolving, and merchants who continually assess and optimize their payments arrangements will maintain a competitive advantage. Within private equity portfolios, marrying together the need for consolidated arrangements, with your portfolio’s unique requirements on a business-by-business level, is a complex task.

We have over 25 years of experience and negotiating power, and our team of analysts and consultants are committed to getting you the best deal possible. By working with CMSPI, you will lower internal resource requirements, implement improved solutions faster, and achieve greater savings and optimized arrangements across your portfolio.

Want to optimize your arrangements?