Blog | May 13, 2014

Reactions To The Vantiv-Mercury Deal

By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

Vantiv-Mercury

In the wake of yesterday’s big payments/POS news, I sought reactions from a handful of retail IT VARs, ISVs, and vendors -- including Vantiv and Mercury (don't miss their comments at the end of the article). I don't want this article to imply that this deal is good or bad for the channel. The reality is that it's too soon to know for sure and details still need to shake out. That said, the following reactions are real and valid at this point in time.

Will Atkinson, president of CAP Software, is optimistic. “I think it can potentially give the channel a competitive benefit due to Vantiv’s aggressive pricing policies and generally greater scale,” he says. “My concern in the near term is that there will be confusion about reseller account management, and also in the blending of product strategies.  We’ve invested heavily in Mercury’s E2E platform to help us with our out-of-scope initiatives, but Vantiv already has Element’s technology for that, so we might see some disruption, or at least confusion, around product strategy as it applies to developers like CAP.

“I hope that it gives us a bigger, better funded partner, making us and our resellers more competitive against the other bigger players like First Data and Heartland,” Atkinson continues. “I also believe we’ll see more of this. Vantiv is on its second acquisition, and Heartland is buying/building POS companies, so I think we’ll see a lot more consolidation.” 

One anonymous long-time payments industry executive says "I think this will be good for business - as it forces the better suited competitors to up their game for that market and allows those of us that are in this business for the long run to withstand the race to the bottom that the 'Johnny Come Lately's' bring to our business."

"I hope that it gives us a bigger, better funded partner, making us and our resellers more competitive against the other bigger players like First Data and Heartland."

Probably my favorite quote comes from Bob Bauer, president of retail, restaurant, and grocery VAR Business Machines Company, Inc. (BMC): “You don't buy anything with a number that ends in ‘billion’ to screw it up.” Succinct and a good point. You'd assume that such an investment would be well-planned and executed in a way that keeps Mercury's value intact.

One retail and restaurant VAR (and Mercury partner) is worried and said “Vantiv's model -- to this point -- has not been very VAR centric.  Now we as VARs will be competing against the Vantiv agents and ISOs for the same merchant services.  I have to say that I am shocked and do not know what to take from this.”

“I’m concerned,” says Brett Bennett, CEO of POSitive Technology. “Rarely does the consumption of a company result in something better, just bigger.  The obvious play for Vantiv is the connectivity that Mercury has built throughout the POS development community, which is why we haven’t partnered with Vantiv.  Can Vantiv continue to provide the personal service, and ‘home town’ feel of Mercury?  I highly doubt it.  However, if we are able to continue to grow our portfolio and get high quality service and support, though not as personal, I think we can still move forward."

And, of course, there's some chatter on Twitter:

So let's hear from Mercury! "This will be a strategic acquisition by Vantiv and a strategic move by Mercury to obtain scale by leveraging the strengths of both companies," says Randy Clark, Senior Vice President, Marketing, Mercury Payment Systems. "Our channel is our most important asset. Mercury brings the last mile of merchant services and support with our channel partner network and the Mercury staff that works with them. Vantiv brings a broad technology platform with omni-channel commerce capabilities, scale and complementary verticals. Combining forces with Vantiv uniquely positions us as to deliver a broader set of value-added products and services to our partners and merchants.

He continues by saying that part of the reason Mercury was so attractive to Vantiv was because of Mercury's channel relationships. "Mercury's greatest assets are our people, culture, and channel," he says. "Vantiv views those assets the same way Mercury does. By bringing the two companies together, we will only be stronger in the highly competitive payments space."

Vantiv, addressing concern from the VAR earlier in this article, says "During the past several years Vantiv has been expanding its partnerships in strategic, high-growth channels, especially in integrated payments. VARs and ISVs are key and valued partners in Vantiv’s success.”

As mentioned at the outset of this article, this news is still unfolding and the reality is we don't regularly see this type of thing in the POS channel. It's easy to overthink the acqusition and draw conclusions. The coming days, weeks, and months will better reveal how this acquisition will affect the channel.

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