Thomas J. “Tim” Litle IV ’58 is an engineer and serial entrepreneur who has spent all but six months of his 50-year career working for companies he started himself. His Card-Not-Present (CNP) credit and debit card payment processing companies and the software and methodologies developed by them have set standards and changed the way direct marketers and Internet companies get paid. Litle’s companies are either directly or indirectly involved with processing more than 90 percent of the billions of CNP transactions that now touch our daily lives.
After Hotchkiss, Litle went on to California Institute of Technology, where he received his B.S. in electrical engineering and then to Harvard Business School (HBS), “taking every entrepreneurial course I could. I wanted to be a technical entrepreneur, although at that time it wasn’t clear what that meant.” Litle went to work for Litton Industries immediately after HBS for a few months before founding his first company, Information Services Inc., in late 1964. “A politician friend wanted to be able to mass-mail customized letters to specific groups of voters. I thought we could use computers to create targeted letters based on information about groups of people. So I started a business with Roy Chapin ’58 that pioneered computer letters and advanced the technology of maintaining advertising and magazine subscription mailing lists. We also developed the model and pilot for Carrier Route Presort, a process which is still used by the United States Postal Service.”
That company was sold, and in 1977, Litle and his wife, Joan, bought a catalog company called Clymer’s of Bucks County, which sold American handcrafts. “Catalogs were losing 2.0 percent of sales because of inefficiencies in the payment processing system – there was nothing in place to facilitate credit card payments where the card wasn’t present at the point of sale. We complained to our payment processor, and were told, ‘if you are so smart, why don’t you solve it?’” Litle, along with a partner, launched Direct Marketing Guaranty Trust (DMGT) to process the CNP payments for catalogs, which eventually brought that 2.0 percent down to 0.1 percent, saving the industry between $1 billion and $2 billion per year.
In 1985, Litle left DMGT and began the first Litle & Company with no equity but with $600,000 of unsecured credit from a bank interested in the company’s potential and the assistance of Wes Guylay ’58. “We attracted customers like AOL, Lands’ End, and most of the infomercial merchants who sell products on late-night television. We made significant contributions to the card networks such as address verification, where a customer must provide a billing address to validate card numbers and the three- or four-digit security codes on credit cards to discourage fraud. We also introduced installment billing.
“Visa had rules against merchants’ managing installment payments because the interest would be paid to the seller and not the credit card issuer. We explained that companies such as NordicTrack valued the resulting increased sales stimulated by installment billing much more than the interest income, so we negotiated a rule that would prohibit the seller from charging interest on installment payments. Six weeks later, Visa ended up selling installment plans as a feature. Like my other ideas, installment billing was at first a dumb idea, then it was an interesting idea, and finally it was Visa’s idea.” By 1991, Litle & Company ranked #16 on the Inc. 500 List of fastest-growing companies in America. In 1995, Litle sold both DMGT and Litle & Company to First USA. “I didn’t sell them my name, so they renamed it Chase Paymentech which became JP Morgan’s payment processing business.”
Over the next few years, Litle managed investments, explored a new entrepreneurial business, focused on the many industry boards on which he served, and was frequently asked to speak, testify, and consult as an expert on credit and debit cards, industry ethics, privacy, consumer protection, and regulatory issues. In 2001 after his non-compete expired, he started another Litle & Company to provide payment processing for CNP transactions, which this time did even better and became #1 on the Inc. 500 List. That had a lot to do with his son, Tom ’84, who was President and CEO. In 2012, Litle & Co. became a subsidiary of Vantiv Inc. Litle has since retired, and Tom has moved on.
Inducted into the Direct Marketing Association Hall of Fame in 2005, Litle joined 90 members, who include the founders of L.L. Bean, Eddie Bauer, and Cabela’s. He has been tapped to share his expertise by various agencies such as the International Organization for Economic Cooperation and Development and the White House. He was honored in 2007 with the Edward N. Mayer Award by the Direct Marketing Educational Foundation for his role in promoting relevant education, self-regulation, and ethical behavior that supports the future of Direct Marketing. He is also the recipient of the CIO 100 award for his groundbreaking software development techniques and in 2014 received the Silver Apple Award to honor his contributions to the Direct Marketing industry. Litle credits his success to curiosity, belief in what you’re doing, solid discipline, and drive.
Litle came to Hotchkiss as an upper mid, and his experience with ham radio came in handy. “Radios were not allowed, and the School turned off the electricity at 10:00 pm. I repurposed the electrical infrastructure to transmit signals at night through the ‘cold’ electrical outlets of Tinker (then Alumni). I subsequently discovered that signals could be transmitted all day by using the grounded side of an electrical outlet and a radiator connection instead of using the ‘hot’ side of the electrical outlets. I hope the statute of limitations has kicked in, because I have never before confessed publicly to these shenanigans that someone named ‘Radio Free Hotchkiss.’” As to the value of Hotchkiss, Litle believes in the fundamentals of math and science, and notes that, “You learn to write at Hotchkiss.” He also greatly values the family ties, daughter Virginia ’81 (a past Alum of the Month) and son Tom ’84, and the lifelong friendships made on the hill. He participated in a technology panel on campus during his 55th Reunion in 2013 with four close classmates, and adds, “I had dinner with Wes Guylay and Roy Chapin within the last week.”