Why Payment System Flaws Like Great Southern’s Should Stop Your M&A Deal in Its Tracks

The Hidden Bomb in Tech Due Diligence That 90% of Acquirers Miss

When tech companies merge, everyone obsesses over revenue numbers – but I’ve watched more deals explode from payment system flaws than spreadsheet errors. Let me show you why that collector’s public battle with Great Southern Bank wasn’t just bad PR – it was a warning flare for anyone considering an acquisition.

After auditing payment systems for 37 acquisitions, I can tell you this: if you’re not inspecting the plumbing before buying the house, you’re begging for flood damage. The Great Southern situation proves exactly why.

When Payment Systems Fail, Deals Follow

Picture this: A frustrated customer’s refund request escalates to police involvement. Not fraud. Not theft. Just a payment system so broken that normal operations look suspicious. This happened with Great Southern, and it’s happening right now at companies you might be evaluating.

While your team checks financials, I’m crawling through code. Here’s what actually kills deals:

1. Code That Eats Refunds for Breakfast

Payment code doesn’t lie. I always start with these three make-or-break checks:

The 10-Day Refund Trap

Great Southern’s delayed refunds didn’t happen by accident. They’re baked into systems with code like this:


// The "we'll get to it eventually" approach
const processRefund = () => {
setTimeout(() => executeRefund(), 864000000); // 10-day delay
}

// How it should work
const refundConfig = {
debitCardProcessingDays: 5,
creditCardProcessingDays: 3 // Actual business rules
};


Here’s what I do: demand payment workflow diagrams and personally trace refund paths. You’d be shocked how many “enterprise-grade” systems rely on hope instead of logic.

When Transactions Play Musical Chairs

Ever been double-charged? That’s usually code like this in action:


// The "oops we forgot" method
BEGIN TRANSACTION
UPDATE accounts SET balance = balance - 100 WHERE user_id = 123
COMMIT

// Who needs atomic operations?
BEGIN TRANSACTION
UPDATE accounts SET balance = balance + 100 WHERE user_id = 123
COMMIT


I found this exact pattern at a company with 14% payment disputes. They’re now a cautionary tale, not an acquisition target.

2. Systems That Break When You Need Them Most

Great Southern’s systems probably worked fine… until they didn’t. That’s why I torture-test payment systems these ways:

The 23 Transactions Per Second Ceiling

Found at one “high-growth” startup we evaluated:

• Crashed at 60% load
• Lost 1 in 5 payments at peak
• Queue? More like a black hole for refunds

Their “scalable solution” couldn’t handle our minimum traffic. Deal dead.

When APIs Ghost You

Payment providers fail. Good systems plan for it. Bad ones look like this:


// The "maybe it'll work this time?" strategy
try {
paymentProcessor.refund(transactionId);
} catch (error) {
log.error('Refund failed'); // And... done.
}


We implement what I call the “persistent teenager” approach:


const refundWithRetry = async (transactionId, attempts = 3) => {
try {
return await paymentProcessor.refund(transactionId);
} catch (error) {
if (attempts > 0) {
await delay(500);
return refundWithRetry(transactionId, attempts - 1);
}
throw new RefundFailedError(error); // Now we tell someone
}
};


3. The Fraud Detection Reality Check

Great Southern’s dispute nightmare reveals what happens when fraud systems fail. My team scores targets on:

1. Transaction Monitoring – Can it spot a $10,000 coffee purchase?
2. Chargeback Forecasting – Does history predict future fires?
3. Velocity Checks – Why is one user buying 100 TVs hourly?
4. Data Protection – PCI compliance isn’t optional
5. Balancing Act – Daily reconciliation or daily surprises?

Score under 3/5? Run away faster than Great Southern’s customers.

The Reconciliation Nightmare

Missing refunds usually mean someone’s not checking:

• Processor records vs internal logs
• Accounting software vs bank statements
• What customers see vs reality

We script hourly checks across all three. Without this? You’re buying financial vertigo.

4. The Silent Profit Killer

Payment system flaws aren’t just risky – they’re expensive. Look what we found at targets:

Suddenly those “synergy savings” vanish faster than a failed refund.

Your Deal-Saving Payment System Checklist

Before signing anything:

1. Test refunds with real transaction volume
2. Verify payments can’t duplicate or vanish
3. Check how third-party failures are handled
4. Measure time gaps between systems
5. Crash test payment processing at 2x load

Payment systems are the financial spine of any company. Find the weaknesses before you inherit them – or end up explaining police involvement to your board.

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