Pioneering online payments

Litle & Co., a payment processor and consultative merchant services provider, was founded in 2001 to focus specifically on card-not-present transactions. According to Tim Litle, founder and Chairman, no other companies at that time were developing solutions for online processing or providing the products and services in what is still considered a high-risk market by many payment professionals.

Litle has been in the payments industry for 35 years and has seen the world change dramatically in its ability to access, receive and process online data. Additionally, the Internet revolution has changed the way consumers shop. New payment innovations enabled Litle to build proprietary software that was, he felt, the most secure and efficient in the card-not-present world.

Litle's experience and industry savvy set the stage for his company's success. In 2006, Litle & Co. was named No. 1 on the Inc. 500 list for fastest growing company in the United States. Litle & Co. serves multichannel and Internet retailers, as well as online service providers. The company also offers multicurrency conversion services to its U.S.-based merchants who have international operations. It can process in 200 currencies and settle in nine different currencies.

Prioritizing the merchant

Litle & Co.'s tag line is "The card's not present. But we are." Jason Pavona, the company's Executive Vice President, Sales and Marketing, noted that Litle & Co.'s business philosophy revolves around asking the question: What has the company done for the merchant today? And then answering with a hands-on approach to help increase merchant revenue and reduce operational costs.

"We have a very high-touch organization," Pavona said. "It's about us reaching out to our merchants before there is a problem, issue or question. And whether it's about minimizing expenses, increasing call center efficiency, authorization rates or fulfillment processing, we're sitting there helping them to provide the best formula for success. Our agents are paid to get the right answer and proactively go out and help a merchant grow their business."

Litle's professional biography found at www.litle.com reveals he has dedicated more than three decades to developing innovations that optimally serve merchants' needs. For example, he created the first third-party fulfillment service bureau for catalogs in the 1970s. In the 1980s, he and his partners built the first payment management platform to address the needs of card-not-present merchants.

He was also instrumental in developing the three-digit, anti-fraud identification numbers on the backs of credit and debit cards. Litle continued to focus his expertise on card-not-present technology, and in the 1990s, he ran two online processing companies. After he sold those in 1995, he observed stagnation rather than further innovation in the field. After five years, Litle returned to the card-not-present space, intent on developing the potential he saw for new, alternative payment offerings.

"The ability to not only grow revenue but increase the operational efficiencies of businesses was really there," Pavona said. "Tim wanted to build a platform that could generate that data, so he spent about two years creating that platform with 10 other outstanding engineers. In 2002 we started putting our first merchants on that platform and really focused 100 percent on the card-not-present market."

Pavona added that the company is entirely "homegrown," meaning it developed proprietary boarding, reporting and accounting systems and a processing platform that connects directly to the card networks.

Enhancing the analytics

Pavona said the Lowell, Mass.-based company is particularly excited about a new reporting and analytics platform that enables merchants to understand in real-time, and in detail, how their businesses are performing; how, why and where chargebacks are happening; and how to track authorization performance."We have a phenomenal ability to create very customized reports for our individual merchants that provide business intelligence into their organizations and provide them with the tools and methodologies to help them grow their business, not only on the revenue side but in their operational efficiencies as well," Pavona said. He added that the company also helps merchants understand the value chain and where they fit into their respective market segments.

"And so helping them understand chargebacks, authorizations and fraud issues, for us, just goes back to, how can I get more data back to that merchant to help them make better decisions?" Pavona said. "The requirements for merchants around data protection aren't getting easier. It is, unfortunately, getting much harder, and the state-by-state regulatory environment is changing every day. So it's paramount for us to deploy the best protection solutions for all consumer information."

Processing the gamut

Platforms built by Litle & Co. process the majority of e-commerce and direct marketing payments in the United States, according to Pavona. "A majority of our international business is in pounds and euros, and we also have business partnerships in Asia, South America and Canada," he said. "But we focus almost exclusively on U.S. businesses that have operations abroad. The landscape has changed so much in that our global footprint was an incredibly important part of having a platform that serviced merchants in the mid-sized market worldwide."

Litle & Co. further expanded its operations when it teamed up with alternative payment processor PayPal Inc. in 2007. The company also implemented the products that enable payments through Bill Me Later, which PayPal acquired in 2008. Colleen Martin, Strategic Alliance Manager for PayPal, believes that Litle & Co.'s comprehensive services combined with PayPal's global online footprint have been a win-win for both organizations.

She added that one of the great things about working with Litle & Co. is that it is "almost like a one-stop shop," where merchants can receive a private-label program, an alternative payment platform or a bill payment service - products that enable merchants to tap into a wider variety of consumer populations and generate new and incremental revenue.

"We continue to hear from our clients that Litle is continually strong in the area of merchant services and their ability to provide that personal touch to merchants," Martin said. "They are nimble and quick, so they're able to innovate quickly and also provide detailed analytics to our merchant base. That is critical to them, as they are looking to manage their overall business and deploy their offerings to the marketplace."

Seeing the big picture

Litle & Co. believes in taking a holistic approach when it comes to protecting its clients, since its merchants conduct business across the country and around the world. Data protection laws, Pavona said, are different between states but even more complex and varied between the United States and other countries.

"It's our view that protection of consumer data, through new encryption technologies like tokenization, triple data encryption algorithm and real-time authorization is incredibly important, but you've got to look at it holistically," Pavona said. "If you only look at PCI DSS [Payment Card Industry Data Security Standard], you're really doing a disservice for your business over the long term."

Litle & Co. sells its products and services through a direct sales team and is always on the lookout for top talent. The company also operates a partner referral program through which it works with logistics and fulfillment houses and order-processing providers that offer payment processing services to merchants. So a consistent, standardized training model is critical for success.

The company implemented an in-house training program called Litle University that is designed to make sure all staff - from the Chief Executive Officer to the newest merchant services representative - are highly educated in the payments space.

"We want our agents to understand all the markets we serve, so this program addresses what the authorizations, settlements and cardinal rules are on certain transactions," Pavona said. "It's about understanding the challenges and complexities of companies that sell goods and services directly to consumers and Internet retailers.

"So Litle University has gone a long way to what I would say makes our team more thought leaders and consultants within the communities they serve. We take our training very seriously."

In the end, Litle & Co.'s success is a testament to Tim Litle, Pavona believes. "The unique platform and sales/consulting team he put together really services these merchants like no other processor or acquirer," he said. "Online transactions continue to grow as people stay at home more and shop online to save money.

"And quite honestly, a healthier business drives down the risk that we're taking every day, and higher revenues for our merchants is obviously our number one objective."

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