August 15, 2017
Vantiv has the largest payments industry acquisition of 2017 ($10.4B) under its belt — now what?
Integration is the trickiest part of any acquisition and comes after the dust settles and the deal is done. This crucial phase begins in earnest this week for Vantiv and Worldpay. To accelerate its business and achieve the full value of the acquisition, the new Worldpay (Vantiv is taking on Worldpay name) must accomplish three specific things above all others: Prevent senior management from leaving; integrate two cross-Atlantic cultures; and harmonize technology platforms to make it easier for customers to do business with the new entity without losing key capabilities. Additionally, to keep customers and investors happy it must also find ways to reduce costs and identify redundancies.
What’s at stake? The new Worldpay must act fast to establish itself as a global leader in payments – but that hinges squarely on delivering great customer experiences throughout the entire customer life cycle. In the integration process after an acquisition it becomes too easy to take an inside-out approach. Leaders must set a bold vision that is outside-in and increases employee buy-in and fosters customer trust. Here are the three critical components that the new Worldpay must get right to maintain customer acquisition rates and investor gains in the next 24 months:
- Align the organization around the customer and their customers — fast. Choose an integration leader with an international background who understands the intersection between critical client touch points like product, marketing, and sales. Integrate product and marketing organizations quickly so teams can start the work of harmonizing product sets and a go-to-market approach, plus offer unified customer service. Pick and choose best practices from both organizational structures, such as Worldpay’s market segment approach and Vantiv’s responsive partner sales and demand generation capabilities.
- Simplify processing platforms to deliver great client and ultimately omnichannel experiences. Enterprise merchants want to rationalize payment vendors and are looking for payment integrations that take weeks, not months. In fact, in our State of Retail Payments report last year, retailers listed “ease of working with vendor” as a top priority (see figure below). Worldpay must smartly integrate multiple platforms across the two entities to make it easier for customers and partners to do business with the new company. The additional bonus in doing this hard work? It optimizes Worldpay’s own cost structure while helping their clients deliver better omnichannel experiences.
- Culture and talent retention are key. Although both companies were hatched from banks in the last 7 years, any two organizations that merge may be very different culturally. For example, Vantiv emerged from Fifth Third and quickly started acquiring ISO, eCommerce, and integrated payment players that have shaped the company into a flatter, sales-driven company. By contrast, Worldpay went from RBS ownership to Bain Capital with a more hierarchical business management structure. In this instance, Worldpay also must understand that what worked for Vantiv in the US won’t always apply to the UK and European markets. Melding the two cultures into one that puts customers front and center will be the key to overcoming any short-term bumps in the road.