Vantiv Looks to Its Litle Acquisition to Power E-Commerce Future

Vantiv is counting on its acquisition of Litle & Co. to fuel a substantial push to win share for digital payments processing.

"We're excited about Litle's tech, data and analytic expertise and its leading position in the fast-growing e-commerce market," Vantiv CEO Charles Drucker said during the company's first-quarter earnings call on May 6. "Litle will add to Vantiv's top line growth rate going forward." 

Vantiv recently closed its $361 million acquisition of the e-commerce processor. Litle sells technology to automate processing for a range of card-not-present digital payments, including person-to-person and mobile payments. It also offers a fraud prevention toolkit, fraud chargeback services and international payments processing services for a roster of clients that include GoDaddy.com, Overstock.com and Ancestry.com.   

"We'll have cross-selling opportunities to our existing merchant based and in emerging clients that Litle was too small to pursue as a standalone company," Drucker said. 

The Cincinnati-based Vantiv, which changed its name from Fifth Third Processing Solutions ahead of its IPO in March 2012, reported revenue increased 15% to $498 million in the first quarter as compared to $432.8 million a year earlier.  Net revenue increased 17% to $272.9 million in the first quarter as compared to $232.6 million a year earlier.  

The company positioned the earnings as positive, though it was peppered by investors during the conference call, who asked about the company's organic growth beyond the impacts of the Litle acquisition.

The company increased its market share by 1.3% during 2012, reaching 14%, up from 13.5% in 2011, Drucker said. "We're in a favorable position as we win share in traditional markets and expand into high growth areas," he said.

Vantiv competes against Fiserv, Total System Services, Heartland Payment Systems and Global Payments. It also faces competition from digital and mobile payments-heavy companies like PayPal, Google and Square. Vantiv's mobile acceptance technology growth is strong, though Vantiv did not release adoption figures. "We're seeing good traction in that space," Drucker said.

Vantiv is also making progress in the payments facilitator space, Drucker said, noting recent client wins include Yapstone, Property Solutions and PayLease, which are companies that automate rental payments and other recurring lease payments that have been traditionally been made by cash or checks.

"These client wins will help us as renters move from cash to cards for monthly payments," Drucker said.

Part of Vantiv's strategy to build share also includes strategic partnerships. Vantiv recently partnered with ICBA Bancard, a unit of the Independent Community Bankers of America, to offer members of the trade group credit card and merchant services.

Other partnerships include a deal with London-based Optimal to offer online gateways to U.S. merchants, including Visa and MasterCard payments. Vantiv is also a participant with PayPal and Discover's effort to build an in-store payments network.

"We're open to partnering with new and emerging players to use scale and gain leverage in areas that we're not in today," Drucker said.