Tim Litle Launches the Next Generation of Payment Processing with The New Litle & Co.
LOWELL, MA – October 15, 2002 – Direct marketing pioneer Thomas J. (“Tim”) Litle is back in payment processing with the new Litle & Co., dedicated once more to bringing innovation, service, and accountability to the credit card processing field.
Using state-of-the-art technology, the new Litle & Co. offers a new generation of payment processing tailored to each direct marketer’s needs, without “phantom” fees or arbitrary charges, and based on “truth in pricing” and “truth in reporting.”
“I am surprised by what has happened to credit card processing in the last few years,” notes Litle. “First of all, payment processors are no longer viewed as marketing partners. Second, direct marketers are being routinely overcharged on transaction ‘downgrades’ and assessed fees that are difficult to account for in indecipherable reports.
“We’ve looked at payment processing data from dozens of merchants; all of them have had billing errors – and none of these were in favor of the merchant!”
An Opportunity Center
“Because of these kinds of problems,” says Litle, “direct marketers have come to view payment processing as a necessary evil; they see it as a cost of doing business, not an opportunity to reach out to customers. We’ve built our systems so that payment processing can be used as a marketing tool. It’s not just a cost center, it’s an opportunity center. We provide additional services and functionality that help direct marketers to substantially grow their revenue, the value of which often far exceeds the costs of their payment processing.”
The new Litle & Co. offers flexible, straightforward reporting that lets you “balance quickly and investigate deeply.” Reporting cycles can be defined by the merchant, with reports grouped by catalog, business unit, or any other designation the merchant requires. Reports, available on-line, can also be role-based, with different views to match each user’s business needs.
Direct Marketing Innovators
Fifteen years ago the old Litle & Co. built the biggest payment processing business in the direct marketing industry. Now, Litle & Co. has built the best, with “value-added” payment processing that includes enhanced authorizations, enhanced settlement, and enhanced reporting, supported by the most advanced technology in the industry.
And unlike other payment processors, the new Litle & Co. is neither part of a bank nor an extra middleman between direct marketers and the credit card networks. “Many companies who call themselves ‘payment processors’ are really just sales organizations with no fiduciary responsibility, no processing infrastructure, arbitrary and inflated fees, and very little understanding of direct marketing,” explains Litle. “The banks don’t understand direct marketing either, and don’t pay attention to customer service.
“They are also saddled with antiquated technology that stifles innovation,” according to Litle. “Worse yet, the banks have an inherent conflict of interest, since they can represent both the merchant bank and the credit card issuing bank.”
In short, “Merchants are paying too much and receiving too little in return.”
Commitment to Service
The service orientation of the new Litle & Co. is represented by a policy of “Truth in Pricing” and “Truth in Reporting” which assures that all charges for payment processing are fully and clearly disclosed to the merchant.
The new Litle & Co.’s “InterchangeOptimizerSM” assures that merchants will receive the lowest possible “interchange rate” on bankcard transactions (VISA and MasterCard). “We make sure that the data you capture and transmit for payment processing meets interchange standards for the lowest rate,” assures Litle, “including the data needed for the customer’s monthly statement.”
With enhanced authorizations, the new Litle & Co. automatically reprocesses “soft declines” and repairs any transactions with incomplete or inconsistent data.
In addition, the company offers pricing plans that are tailored to meet the needs of direct marketers.
Dynamic Reserves, Fewer Chargebacks
The same realistic understanding of direct marketing risks allows the new Litle & Co. to offer a policy of “dynamic reserves” in which the amount of money maintained in a merchant’s reserve account is not based on a static percentage of sales volume – or an arbitrarily determined cash deposit. Instead, the company takes a comprehensive view of the direct marketer’s financial standing.
“Our reserve rates are not only the lowest in the business,” says Litle, “but can be reduced still further if a merchant’s risk profile is lowered. Our information systems allow us to make very efficient use of reserves, enabling us to reduce direct marketers’ reserve requirements while at the same time increasing our protection from risk. For many direct marketers, we require no reserve at all.”
For example, says Litle, “One of our merchants had been maintaining two reserve funds, one for payment processing and another to pay vendors. We established a single reserve fund and the merchant now has a lot more capital to invest in the business.”
Enhanced chargeback handling is another service offered by the new Litle & Co. By maintaining historical data on all transactions, Litle & Co. can reverse many chargebacks, and can provide supporting data to the merchant for processing the remainder.
The company also offers a “dynamic settlement” option that manages the disbursement of settled (i.e., “deposited”) funds to third parties. “By providing direct payment to suppliers, we help direct merchants to reduce their costs and to obtain other favorable business terms” said Litle.
A Technology Edge
The new Litle & Co. uses the most advanced technology in the industry, with a componentized, Internet-based, XML-enabled architecture. Each system component is designed for growth and is based on an “extreme programming” paradigm that supports rapid development of systems changes that can be implemented in days or weeks, not months or years.
“When we started the new Litle & Co., I assembled a team of systems designers and developers who have both deep knowledge of the latest technology and extensive experience building high-volume transaction processing systems. They combined new technology with a fresh approach to payment processing, and the result is a payment processing system that simultaneously provides more services to direct marketers while reducing our maintenance costs and providing more flexibility. The bottom line is that our technology enables us to give our customers what they really want: better, faster, cheaper and more flexible services” said Litle.
In addition, the company’s systems, with inexpensive and highly secure Web-based connectivity, boast better, more dynamic error-handling and faster batch transmission, which means lower data transmission fees, reduced error rates, and lower operational costs than those of other payment processors.
A Tradition of Innovation
Tim Litle has been a pioneering innovator in the direct marketing business for over thirty years. After creating the first full-service third-party fulfillment service bureau for catalogs in the 1970s, he was among the first to use computers for list maintenance and was instrumental in helping the U.S. Postal Service develop the carrier route coding system in the 1980s. His most significant contribution was the creation of the first direct marketing payment processing service bureau, while becoming an effective advocate and lobbyist for the direct marketing industry within the banking community.
Back in the 1970s and 1980s, banks took a dim view of “card-not-present” or “Mail Order/Telephone Order” (MO/TO) businesses. “They were seen as high-risk, low-value operations” recalls Litle, “when in fact the banks simply had no idea how to evaluate the real risks and value. We showed them that establishing a collaborative relationship made sense, and worked hard to achieve parity with other types of merchants.”
By getting VISA and MasterCard to change their rules, the original Litle & Co. saved the direct marketing industry over three billion dollars annually. It also lowered chargeback write-offs for merchants from about two percent to about 0.1%, created the first credit card installment billing process, and created the original concept for “RFM-Plus,” a service that increases the value of list rentals and exchanges.
About Tim Litle
For more than 30 years Tim Litle has played a major role in the growth and evolution of direct marketing. In addition to his numerous operational and technical innovations, his founding of Litle & Co. helped pave the way for the broad acceptance of credit cards within the catalog and direct marketing fields.
Litle is an active member of the Direct Marketing Association (DMA). He is currently a member of the board of the Direct Marketing Education Foundation. Formerly, he served as a member of the Board of Directors of the DMA, as a member of its Executive Committee, as the founding member of its Privacy Task Force, as Chairman of its Committee on Ethical Business Practice, and in many other capacities.
A frequent speaker at industry functions, Litle has been called upon by the International Organization for Economic Cooperation and Development (OECD) to discuss cross-boarder marketing, as well as by the White House during hearings on privacy issues.
Litle & Co. was featured twice in Inc. Magazine’s list of the 500 fastest growing private companies, and Tim has been honored with many entrepreneurial awards, including a DMA “Gold Echo” Award for his countless contributions to the Direct Marketing Industry.
Tim holds a B.S. from Caltech and an MBA from the Harvard School of Business.
Contact:
Ernie Schell
The Communications Center
215-396-0610
ernie@schell.com
Chris Long
VP and General Manager
Litle & Co.
978-551-0040, x. 211
clong@litle.com
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