Vantiv has bulked up its merchant services capabilities through a series of acquisitions, a strategy that's making it more attractive to financial institutions.
Today, the processor announced an expanded relationship with Capital One, adding a broad range of services for merchants. Capital One's merchant services clients will use Vantiv to deploy new payment products, services, security and reporting tools, along with Capital One's treasury management and ACH transaction services.
"Capital One is the largest partner to date for expanded merchant services," said Stephanie Ferris, the senior vice president of merchant services for financial institutions at Vantiv.
The Capital One deal follows other similar merchant services expansion deals for Vantiv with banks such as MUFG Union Bank, People's United Bank and Comerica.
These client wins follow a long-running strategy that Vantiv undertook to deepen financial relationships the processor spun off from Fifth Third in 2009. "When we spun off the only bank partner we had was Fifth Third," Ferris said, adding the original Capital One processing relationship dates to 2011.
More recently, Vantiv has made numerous acquisitions in an attempt to expand beyond payments processing. These purchases include
Vantiv also acquired
These acquisitions, plus external factors such as the U.S. EMV migration and the pressure traditional merchant acquirers face from technology-heavy payment companies such as Square and Stripe, have benefited Vantiv.
"Recently a lot of things have happened in the payments industry that have helped us land more financial institutions," Ferris said.
Vantiv's play is to enable a single integration for both small and large retailers, along with supporting EMV-chip card migration and mobile point of sale capabilities, which have different requirements for different merchant categories. Additionally, Vantiv is more heavily regulated than the newer companies given its long-standing role as traditional bank payment processor, Ferris said.
"Traditional merchant services businesses that are terminal-based are making a shift that requires more technical needs," Ferris said.
Capital One did not make an executive available for an interview by deadline. In an email, a bank spokesperson said Capital One has relationships with a number of other firms to provide merchant services, and Vantiv will now be providing those services.
Capital One also has internal merchant offerings, such as its
"Capital One is expanding its merchant service capabilities to support larger enterprise level organizations that it currently isn't able to serve with its Spark small business platform," said Thad Peterson, senior analyst at Aite Group. "It allows Capital One to offer a full suite of commercial banking services without the need to invest in merchant acquiring and processing capability."
Other traditional processors have also steadily added technology to ward off the startups and attract legacy acquirers.
Heartland Payment Systems purchased mobile point of sale company
First Data has been nurturing its acquired Clover mobile point of sale business, most recently with the launch of a
TSYS has added an accelerated
The startups have also not stood still. Square, for example, has added
And
