Square's plans to install payments technology in Whole Foods stores will not hurt the processor Vantiv, CEO Charles Drucker contends.
"Our relationship with Whole Foods is strong and it's been expanding," Drucker said during a Feb. 13 conference call to discuss Vantiv's fourth quarter earnings.
Whole Foods locations in Austin have begun using Square Stand and Square Register, which are designed to meet the payments and store management needs of larger retailers. Other Whole Foods locations will support Square Wallet, a cloud-based mobile payment app.
There's a lot of innovation happening at the checkout and Whole Foods is one example of a company that's testing technology to improve the customer experience, Drucker said.
"The [Square] announcement focused on some locations that have placements of the Square Register at the coffee counters and other select locations within the store," Drucker said, according to a transcript. "Overall we believe that's not going to be material to our business."
Vantiv is also focused on offering mobile payments technology to larger clients, Drucker said. "We've been focused on delivering an integrated solution that really can serve the whole store and the entire store with front checkout versus what I'd call one-off solutions," he said, noting Vantiv has partnered with Microsoft to build new checkout technology.
"So as Square continues to do a good job, they have a niche product in the shops. Our focus has been the front checkout, the whole solution," he said.
Drucker also addressed the recent retailer data breaches, saying the incidents may boost some of Vantiv's business lines in security and card issuance. Vantiv has products such as end-to-end encryption and tokenization that can guard against data breach exposure.
Vantiv did not provide detailed guidance on how the breach at Target, a Vantiv client, would affect the processor's financial performance, saying no individual client has a significant impact on Vantiv's same store sales or revenue trends.
Vantiv provides PIN debit processing for Target stores, according to analysts at Janney. Vantiv was not questioned about that relationship during the earnings call and did not return a request for comment from PaymentsSource by deadline.
Vantiv reported revenue of $558 million for the fourth quarter, an increase of 13% from $494 million in the fourth quarter of 2012. Net revenue increased 14% to $308 million in the fourth quarter compared to $271 million in 2012. For the full year, revenue increased 13% to $2.1 billion compared to $1.8 billion in 2012. Net revenue increased 15% to $1.2 billion compared to $1.02 billion in 2012. For 2014, the company projects net revenue of just shy of $1.4 billion, or growth of between 7% and 10%. That's slightly below investors' expectations, Janney said.
"As we enter 2014, we will continue to win new business and invest for growth, including expansion into strategic channels and high-growth segments and verticals. We finished the year strong and look forward to continued success in 2014," Drucker said.