Vesta’s Christopher Uriarte and the “Card Not Present” World

By Lauren Keyson and Sarah Grieco

In the “Card Not Present” world (Best Buy, Amazon etc.), if a fraud occurs on a payment transaction, the merchant is 100% liable for it. That’s where Vesta steps in. Since 1995 they have been in the payment space and are now almost 100% focused on payments that take place online. They process over $6 billion of transactions on behalf of their large clients and on behalf of other merchants in the high-risk online space.  Their New York clients include AT&T and INCOMM, the company that runs the gift card program for all the major retailers all over the world.

Vesta has a disruptive technology that it put together over many years to combat fraud, which started years ago with prepaid calling cards. At Finovate, the conference series focused on innovative finance and banking technologies, we caught up Christopher Uriarte, Vesta Corporation’s Chief Payments & Product Officer.

Christopher Uriarte: Consumers are never really liable for anything, so when there’s a fraudulent charge, somebody has to pay for that. Last year, there was $16 billion dollars worth of online fraud in the United States alone. It’s the merchant who actually pays for that. Merchants realized that they didn’t know how to manage online fraud. Initially, Vesta was working with mobile companies who had large volumes of transactions. Our oldest customers are T-Mobile, Sprint and AT&T and their counterparts in different parts of the world. They’re processing billions of dollars in transactions a year – we come in, process over $6 billion of transactions on their behalf or on behalf of other merchants in the high-risk online space.

We can look at a transaction and determine if it’s fraudulent or not. We have a number of really interesting types of models that we create. We have data scientists that get a lot of different factors about things like where people are connecting in different parts of the world, interacting with the website, sending the data and usage patterns. We also have a big database of information on people and payment types that we’ve collected and maintained over the years.  For example, we know where there are bad places to ship, bad addresses, bad PC’s — we can even get a fingerprint from a PC and know if this guy’s been previously been involved in fraudulent transactions.

So, we detect these fraudulent transactions and guarantee them for our customers.  If we said the transaction is good and we were wrong, then we’d indemnify that transaction for the merchant. So, it solves a big problem for the merchant. We’re the only company in the country that can guarantee and indemnify these online payments. Nobody certainly can indemnify $6 billion worth of payments, which we do today. As online fraud begins to be much more of an issue, there’s more of a need of merchants to have these advanced fraud detection capabilities.

LK: What’s your advice to others that want to get into something like this?

CU:  You have to prepare for frustration. You have to know how to negotiate with people and stakeholders. You have to be good at compromising, articulating what you’re vision is and what your value proposition is. And you need to listen to those around you who can tailor your message based on what they’re saying.





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