Investment climate, Tech
Investment climate, Tech

Shift4 Payments is expanding Vilnius operations

May 27, 2019

The company formerly known as Harbourtouch Payments is changing its name to Shift4 Payments, after a wave of acquisitions in 2018. The company has been developing their product in Vilnius since 2016 an, according to the company’s CEO Jared Isaacman, it is up for expansion in the nearest future. Leading Lithuanian news portal interviewed Mr. Isaacman while he was in Vilnius about the plans this global fintech company has for Lithuania. You will find the original interview in Lithuanian here.

What does this new brand Shift4 Payments mean for you? Does it signal any change in the company’s strategy and plans? 

It’s important to know that Shift4 has been around for almost 30 years. We acquired Shift4 about 18 months ago. Shift4 has really helped to transform the entire organisation – we went from only being able to address a small portion of the market in terms of payments, and now we do everything in the restaurant and hotel space in North America. We have become a big part of the market. Now our customers are big companies such as Hilton, Four Seasons, Mandarin Oriental, Caesars and so on.

When we acquired Shift4, the idea was to move it to be the main brand at the organisation because it signals strength, experience, expertise. It’s a $100bn USD-a-year payments company.

Our employees in the US and in Lithuania are one team, so it made sense to rebrand our offices in Lithuania the same as we did in the US. We are one organisation, even if we are geographically separated.

Now the main technology work is being done in Vilnius. It covers four of the five major technology investments that we are making as an organisation.

Does the rebranding also mean expansion?

Yes, I try never to look at a business based on its geographical location. For me, it’s all one company. So if Shift4 is the main brand at the organisation in the US, it’s naturally applicable here too.

Now what does it mean for people who work here in Vilnius, since this is the heart of our technology operations? This is the great thing – it means that they will be working on a number of different projects across a far bigger company.

It’s going to mean an increase in investments in Lithuania, and an increase in the number of employees, as people are going to be working on things across the entire Shift4 universe.

Why did you choose Lithuania for the new office in the first place? Has this country met your expectations?  

We were going to have a European-based tech development centre, no matter what. We came to that realisation in 2016, when we started the hunt. When we were considering locations, we had a list with a number of countries and cities. Besides Vilnius, there was also Prague, Warsaw, Belfast.

Vilnius was definitely the winner. One of the main reasons was its size. We could be a bigger and more impactful employer here than in Warsaw, where we would have been competing with 100 other technology companies.

Other factors were infrastructure, great broadband connectivity, very high rates of university education – Lithuania has a lot of positive attributes.

As I mentioned before, we looked upon this location as a ‘Silicon Valley’ of Europe. Also, we were very impressed when we arrived. The mayor’s office arranged a tour around the city and showed us a number of other technology companies. And a couple of years later – are we satisfied? Absolutely! That’s why we are hiring so much.

In the last year, we doubled the headcount in the Vilnius office. We went from half a floor to two full floors of the building, and we are going to be taking more space in the future. We are only going to increase our investments here; we are not looking for anywhere else to do it.

How were your expectations met? Is it thanks to hard-working employees, or something else?

We measure productivity using a number of factors. Our organisation has its KPIs, like volume growth. Now we are the fastest-growing integrated payments company in the world, and we have more than 10% of our workforce in Vilnius. It means that our employees here are contributing to this success.

So at the highest level, the company is doing really well. All of our employees are contributing to it, and Vilnius is a big part of that.

When you drill down to what actually comes out of Vilnius office, it’s a ton of stuff.

We are about to do a multi-million-dollar marketing initiative in the US based on our new pay-at-the-table product that was built here in Vilnius. Overall, we are incredibly happy with the results.

How much has Shift4 invested in Lithuania so far? What investment plans and goals do you have in the future? What is the duration of your investment here?

There is no time limit. This is a part of our home now. We are going to be in Vilnius for a very long time, there is no exit date. As long as we can attract and hire great talent here, we are not looking anywhere else. Having a lot of offices is not our goal. We like to condense our operations into three or four areas, and this is our only operations centre in Europe, so we are going to stay here for long time.

In terms of our investment to date, it’s a little over $2 million USD, but it’s growing rather rapidly. As the headcount increases, so does our investment.

We have already budgeted for 30 more employees here by the end of this year, which we will probably surpass. There are going to be continuous, multi-million-dollar investments in our operational development in Vilnius.

What are the responsibilities of the office in Lithuania? Will they change in near future? 

Originally, responsibility was focused on a single product initiative, which was our next-generation restaurant point-of-sale (POS) software. But that changed almost immediately. Right now, as a company, Shift4 has five key technology investments, and four out of the five are run through Vilnius.

We just had a meeting few hours ago, where we asked employees how familiar they were with our different products. With each product we asked about, maybe 25% of the room raised their hands. Four of them were done here, so there are different teams working on different things.

What challenges does the company face here in Vilnius? 

I think the market has become more competitive since when we first moved here. Just in the last couple of years, it seems like there is more demand for development talent. That’s fine with us. It just makes recruitment a little bit harder, but I think we run our operations well.

We don’t have too many challenges here. The people we’ve hired are great. We will keep on hiring a lot – we just need to make sure that the talent pool supports it. But so far, so good.

What are the main characteristics you look for in people who want to become employees of Shift4?

The vast majority of our hiring is related to development: engineers, QA, business analysts. We also have a support group here, such as Level 3-type support, which is working with more advanced product offerings.

We look for well-educated, passionate, hard-working employees who want to work hard and have fun as well. I think that’s part of the culture that Tadas [Tadas Vizgirda, General Manager of the Shift4 office in Lithuania] has created in Vilnius. Out of all our offices, this is the most balanced in terms of the work-play environment.

But after that, it comes down to the position. If you’re a developer or an engineer, we are looking for those familiar with Android and Java. Some of other our products are web-based, which is a different ski. In general, I would say that if you’re in the world of technology and you want to make a change, there are a lot of great opportunities here for you.

We’re all hard workers here. This is definitely not a place where you come to play ping pong for 70% of the day. We all come here to work hard and then play hard when the time comes. This culture does not separate us from others, but we always try to accomplish things and see real results from our concepts as they turn into reality.

What does Shift4 offer its employees? What can people expect here? 

Most certainly this is a company that gives a lot of stability. There are a lot of interesting startups with great ideas, but two or three years later they no longer exist.

Shift4 has been in business for over 20 years. We’ve grown our revenues every year, including during the Recession. We’re a very stable organisation, we power $100bn USD in payments across the US market and North America. This is a company where you can build a career knowing that, 50 years from now, Shift4 will still exist and will still be powering credit card transactions and payments and POS technology all over the world.

Also, we’re a demanding organisation as we work really hard. We don’t have small tasks in front of us. The things that we do impact hundreds of millions of consumers every single day, as our customers are some of the most well-known hotels and restaurants in North America. So we work hard because what we do matters.

Do employees have opportunities to work in the US?

Yes, but I would say it’s a two-way street. We attract people in the US to work here because of the opportunity to come and work in Lithuania.

One of our product managers, who is based in California, is here now for two weeks, as well as our assistant vice president for development. So we keep a steady rotation of people. We bring just as many people from Vilnius to the US for information exchanges and collaboration as we send from the US to here. It’s a two-way street.

In a month from now, we’re doing a huge unveiling to the National Restaurant Association – it’s a big show, there will be around a million people, including restaurant owners and so on. During this event we will unveil Skytab, our pay-at-the-table solution that was built here in Vilnius, so we’re going to have many Vilnius developers there.

Does it help towards cultural exchanges?

Absolutely! We all think of things a little bit differently, depending on where we come from. In a lot of ways Europe is ahead of the US when it comes to alternative payment methods, EMV, chip cards, contactless payments. What we’re doing in the US was done in Europe long time ago. There’s a lot of experience from the payment perspective that is helpful from our European team. There are some things in the US that we’ve been doing a little bit different, like integrations – here, we bring our expertise. So it’s always helpful to bring multiple cultures together.

Wage growth has been steep in Lithuania over recent years. Has it been easy for companies to keep up? 

We’ve noticed that there has been quite a lot of wage growth out here, but it hasn’t affected us. We see a lot of value coming out of our Vilnius operations team, while we’re investing more in it.

Also, I never look at Vilnius as an outsourced developer; it’s part of our team. We’ve had a lot of wage growth in Las Vegas office, too – but it’s just a product of its economy and its market.

As I said before, everyone here is a part of our team. If the local economy improves, the cost of living goes up and wages go up – so we have to support it. That’s the price we pay for having operations here. The work of the Vilnius team makes a big difference, so we’re adding even more employees.

What is the major revenue source for Shift4 Payments? How big is the competition in the market globally, and who are your main competitors? 

The vast majority of our revenue comes from transaction processing. We handle $100bn USD a year in payments. We don’t make a lot on each transaction, but pennies on billions still add up. This is our major revenue source.

The second biggest portion of our revenue comes from SaaS [Software-as-a-Service], which comes from products that are largely built here, in Vilnius.

In terms of our competitors, in the hotel market there are only two others that do what we do in North America.

So there are not many companies, which is good. The competitors are owned by big banks; they are slow and inefficient. It means that we are winning a lot.

In the restaurant POS software space, we only have one competitor that matters. It’s called Toast. It’s a startup, and they’ve got some good stuff going on, but around here we talk about our products as being the Toast-killer.

We are fortunate that we don’t have too many competitors doing what we do.

In fact, another way to think about it is that, oftentimes, our competitors will need to use four or five different companies to deliver the same service and experience that we can deliver by ourselves, and that’s a huge advantage for us.

What makes your company stand out?

Firstly, the underlying technology that powers what we do is very hard to replicate. The actual Shift4 payment platform has been around for more than 30 years and we still have only two competitors. So we’re not necessarily worried about a new payment platform showing up tomorrow. There is a company, Rebel, that has a big presence here in Vilnius. They make POS software; Toast makes POS software, so does NCR.

What makes us special is that we do four or five things that would otherwise be done by four or five different companies.

If you were a business owner, would you rather have one person to call or five? Would you rather pay one party, or five?

In the end, they get a better service with us. What would otherwise be more complicated, we simplify. And it costs less – so client satisfaction is higher.

Should customers expect any disruptions in the payments market in the upcoming years? How could the market change? 

I don’t see any disruptions at all. Even with alternative payment methods like WeChat Pay, AliPay, Venmo and others, at the end of the day, the actual main rails – Visa, MasterCard, Discover, American Express – are super-solid. They’re not going anywhere, especially in the US market. So we’re not concerned about any disruptions, and neither are our customers. The underlying technology that powers credit card activity across the world is very stable.

What opportunities do you see to expand your business in the future, and in what areas?

We’re growing faster than anyone else in the world right now. We’re growing at around 130% year-on-year just by focusing on the restaurant and hotel verticals, and it’s a $2 trillion USD market in North America, so we’ve got a long way to go. We want to get as much out of it as we can.

But it is only inevitable that we will expand into Europe. Our customers are here in Europe – Hilton, Four Seasons and so on – so we have to be able to deliver the same experience we give them in the US, anywhere they want to go, whether it’s in Asia, Europe or somewhere else.

We are a very large payments and POS technology company in North America, but we’re unheard-of outside of that – except here in Vilnius. It’s inevitable that we will end up expanding globally.

I think it’s a good opportunity for the organisation, and I think it’s a great opportunity here in Vilnius, because this is going to be the first place that’s going to be tasked with figuring out a lot of the complexity that it takes to do business globally.

Do you have any other investment plans in this region? What about your aviation business? 

My aviation business is very unique. There are only two other companies in the world that really do the same. We fly fighter aircraft as the ‘bad guy’ for the US and our allies to train against. Ninety-nine per cent of our flying is done in the US, because that’s where the US Airforce is, the Navy and the Marine Corps.

Every now and then, we send some planes across the world to help train locally.

In summer 2017, we had a bunch of planes in Norway for two months, training the Norwegian, Danish and Dutch air forces. We’ve had planes in Germany. Also, for the last four years, we’ve had planes in France, too.

You never know – maybe something could pop up here, in Lithuania… but it’s kind of a niche.

Does it mean that your pilots need to adapt and simulate the mindset of the enemy, so that US fighter pilots can understand how the enemy thinks and what it does?

It’s exactly like the movie Top Gun. In fact, we fly a lot of the same planes that were in Top Gun. We go up with dozens of planes – we have over 100 – and we simulate what the bad guys could do some day.

So then it’s the job of US fighter pilots and our allies all over the EU to react and train as if it’s the real fight. I always hope they will win!

Very impressive. Coming back to the topic of payments, customers in the Baltic States don’t see a lot of competition between banks. Here, the services and prices are very similar. Could Shift4 Payments change any of that in the future? 

We don’t do a lot of core banking at all. Every market is so unique, and banking is so regulated, that I couldn’t tell you if we could make a difference here – any more than I could tell you we could change things in any other country. We focus on the core technology that we know our restaurants and hotels need – point-of-sale systems, property management systems – and then we put all the piping into drive credit card transactions, because we know that’s what travellers and consumers want to pay with.

We don’t try to do banking-related services, and a lot of how it’s done in Europe is different from how it’s done in the US.

In your opinion, what professions do you think will be the most promising in the future? How would you recommend that young people plan their careers?

Computer and software development is not going away any time soon. That’s the number one thing we’re looking to hire in Vilnius, and everyone else in the market is looking for the same talent. The world is all going to be connected and software-driven and integrated, and it’s going to take a lot of talent and individuals to be able to do it, and the spectrum is so wide, from engineering to QA, to cybersecurity – what a great career field!

My first advice for any young professional would be to do what they’re passionate about. If you’re passionate and you’re an expert at what you do, then you might very well become the best at it. And if you become the best at it, you’ll be in very high demand and it will open enormous opportunities for you – whether it’s in healthcare, transportation or technology. So pursue what you’re passionate about.

But aside from that, the world does need – and will need – a lot of technology professionals. It’s an industry in high demand.

Thank you for this interview. 

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Aistė Žebrauskienė
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    Aistė Žebrauskienė Press Officer
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