When our private-equity firm put a value-creation mandate on the table, I expected a cost-cutting exercise. What I got was an education. Working directly with the partner who led it, I watched how PE looks at an operation, and it was nothing like how operators look at their own. Where we saw infrastructure to keep running, they saw a set of levers that had never been fully pulled. The payment engine was the clearest example of the gap.

How do payments show up in a private equity value creation plan?

Payments show up in a value creation plan in three places: the cost of processing, the working capital tied up in transit, and the revenue that could be earned on flows the company already handles. Diligence usually prices the first and misses the other two, which is where most of the unclaimed value sits in any payments-adjacent asset.

Operators normalize their own business. You live inside the constraints long enough that they stop looking like choices and start looking like facts. PE does not carry that history, so it asks the naive, expensive question about everything: why is this the way it is, and what would it be worth if it were different? Pointed at payments, that question turned line items we had quietly accepted as fixed, the fees, the spreads, the routing, the payment-method mix, into a portfolio of value nobody had ever underwritten.

The second thing a mandate changes is the size of the ambition. Left to its own devices, an operating team improves what is in front of it by a sensible amount. A value-creation target reframes the goal: not incremental, but a step change, with a number attached and a clock running. That pressure is uncomfortable, and it is also clarifying. It forces you to stop polishing and start choosing the few moves that actually change enterprise value, which for a company that processes payments is very often the payment engine itself.

The most surprising part was how far the opportunities reached. Once we treated transaction processing as a value lever rather than a utility, it pulled in product, finance, sales, and partnerships. A pricing change opened a payments opportunity. A payments change opened an upsell. Value that looked like it lived in one function turned out to be spread across the seams between them, which is exactly where an operator with a whole-business view can see what a single functional leader cannot. That is how we took value creation from transaction processing to a level none of us had scoped at the start.

None of this works as pure extraction, and good PE knows that too. This is client money and a living business, so the discipline is to chase the ambitious number while protecting the relationships and the operation that produce it. I have since run this at different stages, from scaling growth company to PE-backed value creation, and the right approach genuinely differs by stage. What does not change is the lens: treat the operation as underwritten value, not fixed cost.

You do not need a PE firm in the room to borrow the lens. The most useful thing I kept from that mandate is a single question I now ask of every operation I touch: if a sharp, impatient owner underwrote this from scratch tomorrow, which of the things you have accepted as fixed would they refuse to accept? Start there. The answers are usually worth more than you expect.

If you are a PE-backed team or a founder who wants that lens on your operations, that is exactly the work I do. Start with a 30-minute call.

Common questions from PE teams