Tracy Metzger: Vesta processes anywhere from 300,000 to 500,000 transactions a day and up towards $18 billion in payments a year. We carry elements like their mobile devices and desktop devices. We know the operating systems, screen dimensions, their page viewing history on certain e-commerce websites, and their social reputation information where it’s applicable. There are so many different elements that we use to make a risk screen decision in a split second. If you think about it, Vesta started off focusing on prepaid cellular business 22 years ago.
If you look at consumer behavior, the first thing that a consumer pays is their cellphone bill even before they pay their mortgage or car payment. One could argue that we have amassed one of the largest credit decision database that spans across three continents of operations.
As we expand our business into more e-commerce-based businesses, we feel like we’re well-positioned. We have a whole team of data scientists that are constantly crunching machine learning models in an online and offline fashion. We feel that our information is second to none based on the types of work that we’ve done over the years that help us see a customer whereas an internal risk and fraud department has never seen that customer.
We’ll take one of the scariest things that any e-commerce business sees, which is a new customer. It’s an exciting thing every time you get a new customer, but it’s also the most terrifying thing for a risk management department because they know nothing about that customer. With Vesta, the chances are really good that we’ve seen that customer somewhere in our ecosystem. We are always leveraging that data in every transaction. Machine learning leveraged risk management and information security are the two key industry trends that we align well with.
Sramana Mitra: Talk about what’s on the horizon and what are the open problems out there. If you were starting a company today, what would you zero in on?
Tracy Metzger: There’re a myriad of different problems when you talk about payments. Fraud is one of the biggest challenges that happens in the world. There’s a lot of friction in tools out there today. I’ll be very general in my discussion in the sense that there are so many bespoke solutions that only cover a part of the problem. If you look at the card issuing brands, they all have their own products and services but they only touch a piece of the industry.
With Visa Checkout for example, it’s a great authentication-based solution but as a merchant, it only covers Visa cards. MasterCard has a similar solution. If you don’t implement all these things, it becomes extremely difficult to go out there and manage fraud. I’d argue that there’s no silver bullet that addresses every single one of the growing trends that companies face.