I was just having a conversation about this scene and other things related and curious to see everyone's theories.. Vito (played by De Niro) is told by Don Fanucci he and his friends need to pay tribute. Vito's friends don't resist when they discuss this, but Vito seems to doubt his toughness, and also wonder why he preys on his fellow Sicilians (Vito would prosper, but so did his community... when the single woman couldn't afford rent, etc)...

But notice he takes his friends' money, but only offers Fanucci a portion of it, despite having it all.. To me, it's obvious he's testing him out and when he sees Fanucci accepting less and then even going on to want to work for him, probably realized Fanucci is a fraud who is being paid for nothing. And after he kills him, he takes the money, but never tells his friends I assume, which is why he became The Godfather, and the other two became Capos (Clemenza and Tessio).