Tim Litle has created a new endeavor with a familiar name. The venture, Litle & Co., is offering credit card processing services.
Industry graybeards may remember when Litle sold something called Litle & Co. to First USA in late 1995. That later became the Paymentech operations of Bank One. According to Litle, First USA purchased the payment processes and not the rights to “Litle & Co.,” although Litle did license the name during the transition process.
Litle’s non-compete agreement ran for five years and is no longer valid.
His new company revisits payment processing. Among other things, it will help marketers deal with the plethora of processing fees they pay, often without any accountability, Litle said.
“In some cases payment processors seem to claim surcharges on transactions that were not processed properly, or that they claimed did not have proper characteristics, but they did,” Litle added.
An example might be an airline invoice that didn’t have a boarding pass number attached to it. While such a payment request would usually be processed, it would be deemed a “downgrade”—and have the invoice handling fee increased by the payment processor.
If this is the case, why hasn’t there been more of a hue and cry within the industry?
According to Litle, it’s because most payment processors just are not independent of the banking system.
Furthermore, “Payment processing is pretty complicated,” he continued. “There are lots of charges that are levied in a lot of places. It’s impossible for merchants to figure out—and it’s not a good use of their time.”
Litle’s startup will allow creditworthy companies to shrink the amount of cash they are required to keep on hand to settle disputes between the merchants and customers, and will periodically adjust that amount based on a firm’s cash flow history, he said.
Litle & Co. will also facilitate installment payments.
“Anyone who has a NordicTrack [exercise system] in the attic knows the draw of this option,” Litle said. Such systems were harder sells before customers were allowed to space out their payments.
Litle is bankrolling the operation’s start. It currently employs around a dozen people, and in time he sees the staff growing to around 30, with a similar number engaged in consultative marketing roles for the company’s clients.
In just a little over three months, Litle’s pilot clients have generated more than $1 million in revenue for the company.
Network
