Interview

How can merchants fight ecommerce fraud amid a time of continuous change – Exclusive interview with Vesta

Wednesday 10 June 2020 07:08 CET | Editor: Simona Negru | Interview

Ron Hynes, CEO at Vesta, discussed with The Paypers about how ecommerce fraud has developed and what merchants can do to stay safe and increase revenues

Could you start by giving our readers a short introduction of yourself and Vesta?

Vesta is a fintech pioneer in fraud protection and fully guaranteed payment technologies. We’ve been serving the industry for over 25 years now, and while we are no doubt a payments industry veteran, we are unique in that we maintain a technology and product development focus and growth mentality more similar to a fintech startup. 

Our biggest differentiator is the real-time decisioning platform we’ve built, which utilises data science and machine learning, and incorporates more than 25 years of intelligence. Our technology is truly industry agnostic – be it supporting our telecommunications customers or any number of online merchant or channel partners, from payment service providers, prepaid cards and eGifts, to eTickets and in-game purchasing. 

In essence, we analyse customers’ online payment transactions to assess the risk of fraud. When a payment is made online, a merchant has to apply technology to determine if it should be accepted. Not all transactions are accepted, but Vesta’s ML intelligence ensures good transactions are rightfully accepted rather than rejected for fear of fraud. Relying on our fraud mitigation solution, backed by a zero-fraud-liability guarantee, our customers can take their 60% approval rates to upwards of 90 or 95%, which brings increased revenue and ultimately profits.

As for me, I feel very privileged to work with a great team of people here at Vesta. I came in as CEO in 2019, and my background includes leadership roles at a variety of established and startup fintech companies. I am looking forward to scaling this company to reach its highest potential – and help our customers to reach theirs through our solutions. 

What can you tell us about the current state of ecommerce fraud? How has ecommerce fraud developed over the past years, and what has been the response to these changes by merchants?

Ecommerce purchasing is at an all-time high, but so is fraud. There has been a dramatic increase in retail fraud attempts for card-not-present transactions with the surge in e- and mcommerce in recent years, and especially over the past 3-4 months, as businesses of all stripes have embraced contactless payments. Some researchers are expecting retailers will lose about USD 130 billion in revenue due to CNP fraud between now and 2023. 

The rising fraud risk seems daunting for many merchants, which leads them to respond in one of two ways – by investing heavily in set-and-forget (often expensive) fraud prevention technology or rejecting any transaction that seems questionable. 

Often, the result is they wind up over-spending on fraud tools – about USD 4 is spent for every USD 1 of actual fraud committed – and overly-tightening acceptance parameters, resulting in an even greater cost in lost opportunity. False-positive declines cost the retail sector around USD 118 billion in lost sales, annually. Add to that the fact that customers who are declined by a retailer typically take their business elsewhere and never return, and these fraud prevention methods could pose a greater risk to revenues than fraud itself. 

Can you share with us some of the ways that the current pandemic has impacted the ecommerce industry?

Ecommerce has of course seen a dramatic increase over the past few months as more people seek safe ways to shop and pay amid the pandemic, and unfortunately fraud increases are in lockstep. At Vesta, keeping merchants and consumers safe online has never been more important.

Any time our partners serve a consumer in an online or mobile channel, that is where we are or want to be, ready to validate those transactions, to reduce fraud, increase approvals, and enable merchants to fearlessly conduct cross-border commerce with our zero-fraud guarantee. For many small to medium sized businesses – some struggling to stay afloat and some trying to keep up with differentiation, channel expansion, and reduced workforce stressors – online has been the sole source of revenue during the pandemic, so every transaction counts. Our aim is to remove the stressors of fraud decisioning and open up otherwise lost revenue to businesses through the duration of this global crisis and beyond.

Taking all these developments into account, how do you advise merchants to approach fighting fraud in the current ecosystem? 

From what I have seen across the industry and from conversations I have had over the past several years, businesses need to change how they think about fraud. 

Many businesses hold to the unrealistic goal of achieving zero fraud. There is one easy way to accomplish that: decline all transactions. But if a retailer intends to build a profitable business, fraud avoidance must be balanced with increasing customer numbers and revenue. Fraud prevention cannot come at the cost of suppressing revenue and alienating potential customers. Adjusting to track approval rates as well as fraud rates is a first step in the right direction. 

Also, many people think in terms of fraud detection, rather than fraud recognition. Fraud recognition involves building deep learning capabilities that allow a system to learn and analyse, the way a human would, to determine whether a transaction is suspicious. Rather than overly tightening acceptance parameters or choosing a set-and-forget fraud fighting tool, effective anti-fraud systems must be given the flexibility to learn and adapt to new fraud vectors – this is the key to fraud protection and revenue generation. 

What is ahead for Vesta? Are there any plans or areas of focus for the future you can share with our readers?

Things are moving very quickly right now. The need for our solutions today is greater than it was 6 months ago, and much of our focus is on serving the rapidly evolving needs of our existing customer base as they navigate this global crisis.

While we’re focused on offering steadfast support to our established customer base, it is also an exciting time for the company. We have seen strong growth in recent months despite the uncertain global environment. We recently secured USD 125 million in capital from private equity firm Goldfinch Partners to invest in growth and the continued global deployment of our fraud protection and ecommerce payment solutions. Over the coming months we will be building our presence in Southeast Asia to fill a market need for fraud and approval services there, and expanding on our existing channel partnerships with payment service providers as well as POS technology solution providers.  

It is a strange time of both extreme volatility and opportunity in the global ecommerce space. My hope is that Vesta continues to solve for the bigger need of returning prosperity to the global online marketplace by providing certainty to merchants so they can stop worrying about fraud and get back to serving their customers and growing their businesses. 

About Ron Hynes

Ron Hynes, CEO at Vesta, has a 20-year track record of leading and scaling high-growth payment businesses. His background spans a variety of established and startup fintech companies, including four years at the helm of Mastercard’s global prepaid business, where he led remarkable global revenue and market share growth. Most recently, as CEO of UniRush, he led the turnaround and eventual sale of the company and its RushCard business to GreenDot. At Vesta, Hynes is charged with leading the company as it pursues an aggressive expansion agenda on both product and geographic fronts.

About Vesta

Vesta is a fintech pioneer in fraud protection and fully guaranteed payment technologies, helping online merchants, major telcos, payment processors, and acquirers optimise revenue by eliminating the fear of fraud. The company’s flexible, scalable solutions enable companies to grow their businesses by focusing on revenue rather than risk, delivering secure, frictionless transactions that maximise acceptance and improve customer experience – all backed by a zero-fraud-liability guarantee.


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Keywords: Ron Hynes, Vesta, ecommerce, fraud, fraud protection, fintech, machine learning, cards, data, online payments, transactions , intelligence, zero-fraud-liability, fraud mitigation, CNP, mcommerce, risks, merchants, cross-border commerce, online marketplace
Categories: Fraud & Financial Crime
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Countries: World
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Fraud & Financial Crime






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