There is a lot of fraud in online payments. This discussion explores the field, and Tracy also provides a pointer to a great open problem that an entrepreneur can look into.
Sramana Mitra: Let’s start by introducing you and Vesta to our audience.
Tracy Metzger: I’m the COO of Vesta. I’m a 25-year veteran of the financial technology industry, primarily around payments and technology solutions in payments. Vesta is a 22-year-old financial technology company that focuses on payments and product management. Its clients include some of the largest companies in the world ranging from mobile telecommunications carriers to money service bureaus, to mainstream e-commerce businesses that are suffering from exposure to third-party fraud.
What I mean by third-party fraud is rings of criminals that have stolen identities or credit cards and they use those as a way to defraud companies in exchange for products and services that generally have an after market value to them.
Our programs and solutions have a proven track record of reducing operating expenses while growing revenue by providing, what we believe, the industry’s first fully-integrated risk and payment platform that guarantees a full liability offset of chargebacks and their related fees and fines. In a nutshell, that’s what Vesta does.
Sramana Mitra: Why don’t we pick some of your interesting customers and do a few use cases to viscerally understand what you’re doing?
Tracy Metzger: Without necessarily going into the problems of our customers, let’s talk about three different use case where Vesta fits in. If you look at exposure to fraud, it focuses on hurting the reputation of the company. If a company has been exposed to fraud or has a fraud attack and a consumer has had their card compromised by that, regardless of whether that consumer is a customer of that company or a potential customer, they will always have a thought at the back of their mind about what the security implications are.
It hurts reputations of businesses. Additionally, it creates a lot of friction between that company and the card-issuing brands like Visa and MasterCard. There are clear thresholds that Visa and MasterCard publish in different regions of the world that it’s the responsibility of a merchant to maintain their operations and compliance. If they reach that threshold, they expose themselves to potential fines and could, ultimately, be exposed to termination of their ability to accept Visa and MasterCard.
Lastly, we help companies that have direct impacts to their revenue. Vesta is a fully outsourced solution where a company that has been struggling with managing their exposure to fraud takes their risk and chargeback department and outsources that to Vesta. By doing that, you offset the cost of that operational expense. We focuse on a couple of different distinct types of industries, which include mobile carriers and digital delivery of goods or any company that needs an immediate risk decision to fulfill some kind of goods or service.