Latest / Leaders In Payments / Monica Eaton, CEO of Chargebacks911 | Episode 294

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Monica Eaton, CEO of Chargebacks911 | Episode 294 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Speaker 1: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Speaker 2: We're the largest platform in the world, in terms of both on the connecting merchants to FIs and providing the end-to-end dispute resolution.
• 0:28
  Speaker 2: We're the only company that has this as our core competency and we're completely agnostic.
• 0:33
  Speaker 2: That's definitely a competitive advantage.
• 0:35
  Speaker 2: The fact that we operate international and network agnostic is not a small feat.
• 0:47
  Speaker 3: That was Monica Eaton, the CEO of Chargeback 911.
• 0:50
  Speaker 3: She is my special guest on this episode, episode 294 of the Leaders in Payments podcast, and I'm your host, Greg Myers.
• 0:56
  Speaker 3: Monica was on the show back in April of 2020, at which time she held the position of COO.
• 1:01
  Speaker 3: Now, as the CEO, she joins to share the interesting story of her professional journey and how and why Chargeback 911 exists today.
• 1:09
  Speaker 3: We cover this story during the first 30 minutes of the show.
• 1:12
  Speaker 3: During the second half of the show, we talk a lot about innovation, as well as what Chargeback 911 does and what makes it different and unique in the market today.
• 1:21
  Speaker 3: We've got a great episode ahead, so let's get started.
• 1:23
  Speaker 3: Hi Monica, and as I have said earlier, you were on this podcast back in April of 2020.
• 1:37
  Speaker 3: So it's been a little while, so let's have a little bit of an update, but would love to hear about what's going on at Chargeback 911.
• 1:43
  Speaker 3: So thank you so much for being on the show today.
• 1:46
  Speaker 2: Absolutely.
• 1:46
  Speaker 2: It's great to hear your voice again.
• 1:48
  Speaker 2: It has been quite a while In payments years.
• 1:51
  Speaker 2: It feels like forever.
• 1:52
  Speaker 2: Right Things change so rapidly.
• 1:55
  Speaker 2: Where do I start?
• 1:57
  Speaker 3: Let's just dive in.
• 1:57
  Speaker 3: Maybe tell us a little bit about you personally, and maybe where you grew up, where you went to school, where you currently live and we'll circle back to your professional journey in a minute but maybe start a little bit about yourself.
• 2:08
  Speaker 2: Sure, the version of the story that I've decided I like the most is instead I work around all these people in payments like yourselves, people that are veterans for 20 plus years, and I accidentally fell into payments, which is also a fascinating story, like many.
• 2:25
  Speaker 2: But if I really think about where this really started, I'll tell you I have an even more interesting story.
• 2:32
  Speaker 2: I grew up and we're probably similar age, so I grew up when there was Little House on the Prairie, there was Laura Ingalls and I can't even remember a character named Nelly, and there was this whole general store where one of the characters actually lived.
• 2:49
  Speaker 2: Their family lived in the store.
• 2:51
  Speaker 2: You watch that and think this was just a television series and it never really happened.
• 2:57
  Speaker 2: But I'll tell you what this was my first exposure into payments.
• 3:01
  Speaker 2: I literally grew up in a store just like that, in the middle of nowhere in Idaho, this tiny, tiny little town called Howe, idaho, and we lived in the back of the store.
• 3:13
  Speaker 2: As a result, I can say I've been around payments for my whole life.
• 3:17
  Speaker 2: So there I learned how to manage sales.
• 3:20
  Speaker 2: We had all sorts of payment methods, we had store credit, we had a gas station and a farm and had definitely a humble upbringing and some respects.
• 3:30
  Speaker 2: But it gave me an appreciation of money, how money is made, taught me the importance of work ethic.
• 3:37
  Speaker 2: I think at the time I thought it was called slave labor.
• 3:40
  Speaker 2: My parents called it chores.
• 3:43
  Speaker 2: But the world has definitely changed since then.
• 3:46
  Speaker 2: But I probably started to develop my love for business and building things at a very young age.
• 3:53
  Speaker 3: Great Thanks for sharing that story.
• 3:54
  Speaker 3: Certainly don't think we've talked about Little House on the Prairie in my previous 290-some episodes.
• 4:01
  Speaker 2: We need to bring something different and more entertaining.
• 4:03
  Speaker 2: Sometimes this topic especially when you're talking about chargebacks is a pretty dry, mundane subject for most.
• 4:09
  Speaker 2: But yeah, from there I stumbled into technology by accident.
• 4:13
  Speaker 2: We moved around a bit and where I lived I drove an hour to school.
• 4:19
  Speaker 2: We had literally the classic one-room school.
• 4:23
  Speaker 2: I had home school for a while.
• 4:24
  Speaker 2: I moved to different schools.
• 4:26
  Speaker 2: There wasn't a lot of selection and there were new schools being built in different areas.
• 4:31
  Speaker 2: Going into different schools, especially mid-year.
• 4:34
  Speaker 2: One of the challenges that you have as a new student, especially in high school, is there's usually a very low selection of fun electives.
• 4:44
  Speaker 2: I got stuck.
• 4:45
  Speaker 2: At the time I thought my life is over.
• 4:48
  Speaker 2: I'm stuck with taking these coding classes and wood shopping and architecture all the stuff that boys took that I never wanted to take.
• 4:57
  Speaker 2: I really wanted to be a fashion designer and I liked economics, sewing all the things that you would think traditionally.
• 5:04
  Speaker 2: This is what women would like to do.
• 5:07
  Speaker 2: That's what I wanted to do.
• 5:09
  Speaker 2: I was forced to take these classes.
• 5:10
  Speaker 2: They were the only options.
• 5:12
  Speaker 2: I discovered that I actually had an aptitude for.
• 5:17
  Speaker 2: I love math and I actually found I really enjoyed working with computers.
• 5:22
  Speaker 2: In fact, I loved it Coding and at the time we could make these video games.
• 5:29
  Speaker 2: I won all these contests at the school because it was like this passion that I would wake up in the middle of the night and I just couldn't wait to figure out some new, cool thing that I could have in my video game.
• 5:40
  Speaker 2: I got done with that class.
• 5:42
  Speaker 2: I thought I'm not going to go into programming or anything like that, but I thought I think I would really enjoy studying art and architecture.
• 5:51
  Speaker 2: It makes sense, it's math, it's numbers, but you're building something and it's creative Not quite fashion, but a little bit like that.
• 6:00
  Speaker 2: From there I went to college.
• 6:02
  Speaker 2: I studied at University of Idaho in Moscow, super cold, studied there for a little while and got a job as an interior designer and quickly discovered I had just one of the most amazing, pivotal opportunities in my life.
• 6:18
  Speaker 2: We always talk about how much of an effect a great mentor can make, and this guy, blair Rigby, was the owner of this interior design business and I was absolutely.
• 6:31
  Speaker 2: I wanted this job.
• 6:32
  Speaker 2: Of course I was going to college, but I didn't want to wait to get a degree, I just wanted to do what I loved sooner than later.
• 6:40
  Speaker 2: So he was interviewing for interns that were already graduates, and I did something that I'm not proud of, but lessons learned.
• 6:50
  Speaker 2: And I lied about my age and I said, look, I'm a graduate and I think I added like five years to my age and you know, I got the job as a forklift driver.
• 7:00
  Speaker 2: Mind you, I was in the warehouse, not anything that was very posh, but after a couple months, first and foremost, any job that I've ever had, this is a lesson that I learned early on.
• 7:11
  Speaker 2: I think there's a theory that you should just do what you love, and I think I believe in something a little bit different, in which case I think, whatever you're doing, you can actually make that into your love, and that's kind of how I approach life and the things that I do.
• 7:28
  Speaker 2: And so, operating this forklift, I was in charge of organizing all the carpets in the warehouse and in a very short period of time I just decided I'm going to be the best employee that Blair has ever had this company called showcase interiors.
• 7:44
  Speaker 2: So I mastered the forklift, I organized the whole place, I codified all the carpets and everything.
• 7:50
  Speaker 2: I learned how to install carpet.
• 7:51
  Speaker 2: Then I had the horrible meeting where he's like okay, now tell me first of all, what's your real age?
• 7:59
  Speaker 2: You don't have a college degree.
• 8:00
  Speaker 2: What are you doing?
• 8:01
  Speaker 2: And at the time I actually had two other jobs as well, so I was not only going to college.
• 8:07
  Speaker 2: I worked at McDonald's in the middle of the night for a night shift.
• 8:11
  Speaker 2: I worked at a night club on the weekends and it turned out for my night club job.
• 8:16
  Speaker 2: I was noticing they were having problems reconciling, so I convinced my manager to let me work in the finance department.
• 8:24
  Speaker 2: That also was pivotal because it gave me exposure to understanding how P&L's work managing inventory control, managing software, a lot of really cool things and then coupling that with some of the opportunities.
• 8:37
  Speaker 2: Needless to say, blair didn't fire me.
• 8:40
  Speaker 2: He did give me a pretty stiff correction and that really stayed with me and as a result, working at that company, I had tremendous opportunity and quickly delved into just exploring all the different things there are in a business.
• 8:55
  Speaker 2: I think one of the best experiences that anybody can have is joining, you know, a smaller company where you can really develop rich relationships and have an unlimited potential to grow, and that's what I was given and from there things just expanded.
• 9:13
  Speaker 2: I put in the effort and soon, you know, I was a sales person.
• 9:18
  Speaker 2: I was ordering carpets, I was managing the store, and then I was given an opportunity to expand.
• 9:24
  Speaker 2: He was expanding into a franchise model and that led me to what accidentally became my first business.
• 9:31
  Speaker 2: So at age 19 I sold my first business, called resort furnishings, and it was I rented this condo.
• 9:39
  Speaker 2: I thought I'm going to take this opportunity and help build out this franchise.
• 9:43
  Speaker 2: By then I had quit college.
• 9:44
  Speaker 2: I thought I would go back.
• 9:47
  Speaker 2: We all do.
• 9:47
  Speaker 2: We always think we're going to go back and finish at some point.
• 9:50
  Speaker 2: But I was chasing opportunities and you know what?
• 9:53
  Speaker 2: I was having so much fun and I never really thought about the money I was making.
• 9:58
  Speaker 2: I just constantly was raising the bar to see just how much I could learn and was really just enjoying all the opportunities and the experiences to just consume and absorb.
• 10:09
  Speaker 2: And resort furnishings was an idea that was crafted after I moved to this ski resort area, rented a condo and had to furnish the condo.
• 10:19
  Speaker 2: And of course, the reason why I rented the condo is because I had this interior design business and so I made commission.
• 10:27
  Speaker 2: And what a better way to get that developer to buy all the products for me like I needed to be central.
• 10:33
  Speaker 2: This was the main development of the whole community, so I wanted to make sure that I was relevant and that I was connecting with the right people.
• 10:41
  Speaker 2: And there was a lot of building that was going on, all these different income properties, and of course they needed carpet, paint, all the things that I sold.
• 10:49
  Speaker 2: So I rent this condo with this vision.
• 10:51
  Speaker 2: You know, this is how I'm going to get this client and furnish the condo and then realize, all the people that buy in a ski resort town none of them really live there.
• 11:02
  Speaker 2: This is a second or third, maybe their 10th home and they all have one problem to solve, which is they all have to buy furniture.
• 11:10
  Speaker 2: So they get their mortgage to finance the condominium or the chatelle and then they have to handle all the furniture.
• 11:17
  Speaker 2: So I took the opportunity to kind of guide a lot of the new buyers.
• 11:23
  Speaker 2: You can look at my condo, you can get some advice, and had one woman that trusted me.
• 11:29
  Speaker 2: I don't know why, but she said you know, monica, how about this?
• 11:33
  Speaker 2: I'm going to give you my credit card and then can you order all my furniture, do everything for me and put everything together, and then I'll pay you 10% over what the amount is, and so I did that.
• 11:45
  Speaker 2: She was super happy, and then I did that again and again, and again.
• 11:49
  Speaker 2: Then I thought you know what?
• 11:51
  Speaker 2: Actually, I'm going to track down where this furniture is made and buy it myself.
• 11:57
  Speaker 2: So one of the things it was also super helpful is growing up in this tiny little town, we were mostly surrounded by Hispanic populations, and so from an early age I spoke Spanish.
• 12:09
  Speaker 2: Today I haven't practiced I can understand a little bit.
• 12:12
  Speaker 2: I definitely can't speak fluent, but at the time I had still retained a little bit of that knowledge.
• 12:18
  Speaker 2: And after finding that all this furniture was being ordered from Mexico and Costa Rica, I figured out what would it take if I shipped a container here and now I'm making a huge margin so started this little furniture business on the side, called it resort furnishings and then ended up meeting with realtors in the area and one thing led to another and then I had the banks were adding my furniture packs.
• 12:46
  Speaker 2: I created versions of these packs so that it could be automated.
• 12:50
  Speaker 2: I hired a couple of employees and in a very short time I was selling the inter-design stuff and had this furniture company, and then I was offered to sell that company for $76,000.
• 13:02
  Speaker 2: This is a great story because it just shows you how naive I was.
• 13:06
  Speaker 2: I was probably making around 30,000 a month, but I actually didn't even care.
• 13:12
  Speaker 2: I wasn't even paying attention, I didn't even check my bank account.
• 13:16
  Speaker 2: I was just working like mad.
• 13:18
  Speaker 2: I don't think I even celebrated Christmas.
• 13:20
  Speaker 2: I was like obsessed with this and I just wanted to succeed and the most fulfilling thing was helping people and solving problems.
• 13:28
  Speaker 2: So 76 grand to me was like wow, that's more money than I ever have had done.
• 13:34
  Speaker 2: I didn't even think twice and fortunately, the group that I sold this to was another great set of mentors, very wealthy individuals that owned this development company, and as a result, they gave me an interest in other things that they were doing, and I was definitely the youngest, also the only woman, and so it was almost like I got added to the board in some ways.
• 13:59
  Speaker 2: I got to attend board meetings with different banks, getting funding facilities, understanding how development works in construction and, sure enough, where you find wealthy individuals, you also discover that they have a lot of other investments.
• 14:16
  Speaker 2: They're pretty diversified.
• 14:18
  Speaker 2: From there, I had opportunities to get involved in rental car franchises and marketing and all sorts of different.
• 14:26
  Speaker 2: It sounds bizarre because they're such different businesses, but each one it kind of needed the same thing.
• 14:33
  Speaker 2: Here's an idea or here's this startup.
• 14:36
  Speaker 2: We need someone that is now going to come in, figure out what's needed to get to the next level, build a team and really get this going.
• 14:43
  Speaker 2: And that's something that I loved doing and it was actually getting involved in that arena where I was looking at how to create more automation and scale in marketing in rental car companies, even creating service programs for these different businesses that these investors had.
• 15:03
  Speaker 2: That I started to really delve into statistics because I'm a numbers person at heart.
• 15:09
  Speaker 2: I love creative stuff, for sure, but at the end of the day, I love math and I love business because it's just black and white.
• 15:17
  Speaker 2: You can get to the conclusion, as long as you don't give up.
• 15:20
  Speaker 2: You're going to figure out how you can get the right result.
• 15:24
  Speaker 2: You have the guiding principles from the business and it's really just an easy solution and it's constant trial and error and constant learning and it's very exciting.
• 15:34
  Speaker 2: So technology just made sense.
• 15:36
  Speaker 2: So I started learning how to build websites, delving into at the time it was access and cold fusion really really old stuff but I tracked how I grew.
• 15:48
  Speaker 2: I tracked everything with statistics.
• 15:51
  Speaker 2: I probably was bad manager because I managed everyone with statistics.
• 15:55
  Speaker 2: I didn't have a whole lot of time, but I always believe in owner mentality and I would try to find people that Just as much owner mentality I had their passion, they were hard working and they want to learn and I managed everything with statistics.
• 16:12
  Speaker 2: And when you are crunching numbers across the board and looking at all these different things, then you discover that every single business technology, applied in the right way, really creates a great environment for scale and it's easy.
• 16:28
  Speaker 2: It's like a building block you continue to build upon.
• 16:31
  Speaker 2: As long as you can measure something, you can grow it and then you can refine it and it's really just about let's figure out what we need to measure and then be able to tweak that Long story short.
• 16:42
  Speaker 2: After a few years working in some of these various opportunities, I suck my teeth into a technology that was connecting call centers when boy started out in the early two thousands and that was exciting sold that business and then I thought, alright, I'm going to retire me, go get married and have kids and just become an expert housewife, because that sounds like a new challenge.
• 17:09
  Speaker 2: And you know, I've heard it with so many parents.
• 17:12
  Speaker 2: I was tricked.
• 17:13
  Speaker 2: I had my first daughter was like the angel Daughter, the angel baby that anyone could have.
• 17:20
  Speaker 2: Literally I actually thought it was because I was the best mother.
• 17:24
  Speaker 2: I literally thought this.
• 17:25
  Speaker 2: I was like I don't know what all these parents are thinking.
• 17:27
  Speaker 2: Clearly they just don't know how to be a good parent because my daughter, within a week, she's sleeping through the night, she never cries, she's the easiest baby in the world and, you know, created a problem because I realized, man, I thought this is gonna be a lot more work and here I am bored out of my mind, there's nothing to do and as unfortunate as two thousand eight was for all of us, in some ways it gave me an opportunity to create something, because my daughter was born in two thousand seven, so by two thousand eight.
• 18:01
  Speaker 2: I thought I'm just going to start something on the side, it's two thousand eight.
• 18:05
  Speaker 2: We have a crisis everywhere.
• 18:07
  Speaker 2: And so I started out with this little website and that you know.
• 18:12
  Speaker 2: I'm going to figure out how to create a marketplace online.
• 18:16
  Speaker 2: And this was in the days of ebay.
• 18:18
  Speaker 2: Ebay was everywhere slowly but surely.
• 18:21
  Speaker 2: I'm definitely one of those people that I can't do things in a small way.
• 18:25
  Speaker 2: It's either all in or not.
• 18:27
  Speaker 2: I know that about myself and I should have thought that it would never be something on the side.
• 18:33
  Speaker 2: But after a short period I thought you know what?
• 18:35
  Speaker 2: Actually, I want to figure out how I can compete with the bay and I want to build this marketplace.
• 18:41
  Speaker 2: And you know, I failed my way to success, and I mean like miserably failed, going from a very predictable static statistics mentality technology.
• 18:54
  Speaker 2: I had a lot of experience in traditional ad mediums.
• 18:57
  Speaker 2: Everything traditional, everything completely static.
• 19:01
  Speaker 2: You're always looking historical data and it's very constant, taking that and then trying to figure out the worldwide web.
• 19:09
  Speaker 2: The wild, wild west, like everything is dynamic.
• 19:12
  Speaker 2: Whatever you read today, it can't be applied because it's already antiquated, data sets are constantly changing and there's really no manual, there's no guide, there's nothing.
• 19:22
  Speaker 2: It's all trial and error.
• 19:24
  Speaker 2: But it was also a great challenge.
• 19:26
  Speaker 2: It forced me to think in different ways and I confronted all the problems that every business goes through, every merchant goes through dealing with c r m's in their infancy, multiple c r m's integrating with gateways.
• 19:40
  Speaker 2: And you know, I found my sweet spot was kind of like the as seen on tv, taking the celebrity indoors types of products and selling them internationally, because of course, there wasn't a huge market internationally.
• 19:55
  Speaker 2: This was when things were just starting to take off with the internet and everybody wanted american products and of course, exchange rates in the uk were off the charts.
• 20:05
  Speaker 2: So I could hedge that.
• 20:07
  Speaker 2: And just when I got to where you know I think now we can get the champagne out, celebrate success I started getting this little pesky issue called a charge back and I was receiving all these letters that I would just throw away.
• 20:23
  Speaker 2: I don't know what you are.
• 20:25
  Speaker 2: I figure I open like one or two, but I was like you know what?
• 20:28
  Speaker 2: I have a merchant processing account and I know as a merchant I need to know two things how do I make a sale and how do I refund?
• 20:35
  Speaker 2: That's it.
• 20:35
  Speaker 2: Do I need to know anything else?
• 20:37
  Speaker 2: No one told me about anything and then I get one account shut down, then next account shut down and it became just a pain like my achilles heel, where I can never, ever get to a point where I felt like, okay, now this is sustainable, because it was so haphazard.
• 20:57
  Speaker 2: I would think we had two different fraud filters.
• 21:00
  Speaker 2: We had all these different gateways.
• 21:02
  Speaker 2: There is one point where my merchant processor said what, if you want to reduce charge backs, you should improve your refund policies and refund every customer.
• 21:12
  Speaker 2: This is what happens to an entrepreneur to any of us when you start losing confidence because you're just guessing constantly.
• 21:19
  Speaker 2: You abandoned all common sense, which is exactly what I did.
• 21:23
  Speaker 2: And can you believe?
• 21:24
  Speaker 2: This is literally what I did.
• 21:26
  Speaker 2: I implemented a policy what are customers service team and said if anyone calls you, I want you to refund them, no matter what.
• 21:33
  Speaker 2: I want all refunds, and you know that actually didn't even touch the charge backs.
• 21:38
  Speaker 2: All it is create more of a revenue loss, more of a cash flow problem.
• 21:43
  Speaker 2: So push came to shove, I hired consultants, I heard everybody right, and this was also the time when you go online, literally if I typed in the word charge back, you couldn't find anything.
• 21:54
  Speaker 2: There was no such thing as public documentation.
• 21:58
  Speaker 2: In fact, it was a taboo subject, so much so that if I would talk to my account manager, they would say things like issue or acquire.
• 22:06
  Speaker 2: I had no idea what these terms mean.
• 22:08
  Speaker 2: I was just not along cuz I was afraid of looking stupid.
• 22:11
  Speaker 2: And then I would say, well, who's in charge of charge backs?
• 22:14
  Speaker 2: Oh, it's risk management.
• 22:15
  Speaker 2: But don't talk to risk, do not talk to them, do not say the word, do not say the c word ever on any call.
• 22:25
  Speaker 2: It was this horrible taboo, this horrible fear that actually I couldn't confront.
• 22:30
  Speaker 2: I wasn't confronting it, so it was debilitating, and it's one of those stories where push really comes to show.
• 22:37
  Speaker 2: We got to the point and I had convinced my husband at the time to literally drain his 401k.
• 22:44
  Speaker 2: I have now gone through.
• 22:46
  Speaker 2: This is what an exciting, nice business to we're getting eaten alive by charge backs everywhere I don't know how to solve it so we had nearly nothing in our bank accounts.
• 22:59
  Speaker 2: I said, you know, and maybe it's my ego or just want to solve a problem, but I think some of us are just born with that insatiable appetite, that gene.
• 23:09
  Speaker 2: I did what everyone said not to do.
• 23:11
  Speaker 2: I decided, you know what, I'm going to survey every single customer that ever filed a charge back and actually develop a whole campaign and call them, interview them and codify all the results.
• 23:22
  Speaker 2: And then I reached out to all the friends that I had in the industry that also had charge backs and this is before I knew what pc I was.
• 23:31
  Speaker 2: They send me all their data and I called all of them as well.
• 23:34
  Speaker 2: And you know, I found something very pivotal and I discovered that actually my biggest problem with charge backs it wasn't fraud.
• 23:42
  Speaker 2: I had an affiliate fraud problem.
• 23:45
  Speaker 2: Like I definitely had no idea what was going on with these miraculous affiliate networks that I hired.
• 23:50
  Speaker 2: In addition, the majority of these customers actually never called us.
• 23:56
  Speaker 2: So I had all sorts of issues.
• 23:58
  Speaker 2: The good news was I was my own worst enemy, so I could fix it.
• 24:02
  Speaker 2: I had the film issues where packages that my film company was shipping they were getting held in customs.
• 24:09
  Speaker 2: I had a fax number that was showing is a credit card descriptor.
• 24:13
  Speaker 2: I didn't even know what the word descriptor meant.
• 24:15
  Speaker 2: No one was calling because nobody knew how to call us.
• 24:20
  Speaker 2: And then I trace this all down and finally contacted.
• 24:24
  Speaker 2: At the time I think park least was the first, but there's a huge issue right in the UK and I saw it well.
• 24:30
  Speaker 2: You know.
• 24:31
  Speaker 2: The majority of these customers look like they're now coming from this one bank.
• 24:36
  Speaker 2: This was before ethical, before verify, like way before any of this, and as a merchant, literally just now, I'm in survival mode.
• 24:44
  Speaker 2: Just apply in common sense logic without knowing any constraints.
• 24:48
  Speaker 2: I track down the manager of this bank and then develop the relationship because it made sense and every single day I would receive A spreadsheet leave not with full credit card numbers from the bank to my personal email, like we go back and forth, so that I could resolve all of these charge backs, and I did it with two other banks.
• 25:12
  Speaker 2: It was almost like alerts, before alerts even existed.
• 25:15
  Speaker 2: And finally I read everything on charge backs.
• 25:19
  Speaker 2: First, I learned all the definitions.
• 25:21
  Speaker 2: I probably read two thousand pages and I probably read those two thousand pages probably five times, because it was like getting a law degree, because you have to learn an entirely different language.
• 25:32
  Speaker 2: I discovered how charge backs are actually calculated.
• 25:36
  Speaker 2: I got into lots of arguments with banks Because I discovered actually they don't know what they're doing.
• 25:42
  Speaker 2: I learned about all the rules.
• 25:44
  Speaker 2: I learned that I had rights to defend myself.
• 25:47
  Speaker 2: I learned about how to create a better customer experience and we ended up codifying A hundred six different things that we could check for in order to predict the propensity for charge backs.
• 25:58
  Speaker 2: Little things like you wouldn't even think of, like the zip code, and if the zip code is in a rural area has a higher perpensity of a charge back because the shipment will invariably be delayed.
• 26:09
  Speaker 2: Little things like that demographics all sorts of stuff and codified all that, built out our processes and save the business and something amazing happen.
• 26:20
  Speaker 2: I started getting phone calls from.
• 26:22
  Speaker 2: First I got processors that shut down my accounts, that had money on hold, called me to release my funds and actually give me more processing facility.
• 26:33
  Speaker 2: So that was impressive.
• 26:34
  Speaker 2: I thought I died and went to heaven.
• 26:37
  Speaker 2: And then I started getting referrals from merchant processors and I'm thinking you know, this is a massive industry.
• 26:44
  Speaker 2: I'm the only idiot that could possibly do business online.
• 26:47
  Speaker 2: It doesn't already have a perfect solution for charge backs.
• 26:49
  Speaker 2: I start getting companies or these processor, some of them I hadn't even heard of.
• 26:55
  Speaker 2: Hey, I heard that you have great advice for merchants.
• 26:58
  Speaker 2: Can you talk to someone?
• 26:59
  Speaker 2: So can you talk to someone.
• 27:00
  Speaker 2: So, one right after another, and you know what it was therapy.
• 27:04
  Speaker 2: It was actually the best feeling ever to talk to someone who you know exactly what they're feeling because you've been in that pain, and to feel like now you know how to help them.
• 27:15
  Speaker 2: It was invigorating Then finding out that some of these organizations that were being referred for me to just give them some advice, or enterprise organizations one was radio shack huge name.
• 27:29
  Speaker 2: You would never think that Sophisticated company.
• 27:32
  Speaker 2: I never thought that any of these companies would ever even have an issue with charge backs.
• 27:37
  Speaker 2: So that was a point where I thought you know what?
• 27:39
  Speaker 2: Actually?
• 27:40
  Speaker 2: I'm gonna build a website for merchants and I'm gonna call it charge backs.
• 27:44
  Speaker 2: I'm one and I'm just gonna pour my heart and soul out and let the world know that there is something you can do about it.
• 27:50
  Speaker 2: This is a science.
• 27:51
  Speaker 2: You can't be afraid and you have to defend yourself.
• 27:55
  Speaker 2: In our very first slogan when we started out was from defense to offense, because you can't expect that you're going to be able to change things if you don't take initiative.
• 28:07
  Speaker 2: Saying fearful and ignorant is the worst possible thing.
• 28:12
  Speaker 2: Even the name Charge Back 911, at first I thought Charge Back Quarterback sounded like the best.
• 28:18
  Speaker 2: I was overruled.
• 28:19
  Speaker 2: But yeah, charge Back 911, definitely not a name that aligns with the corporate banking world.
• 28:26
  Speaker 2: Never did I think in a million years I would get into the payment industry.
• 28:29
  Speaker 2: I hated banks.
• 28:31
  Speaker 2: I felt like a victim and it was a cry for help.
• 28:34
  Speaker 2: I was fighting for merchants because of what I experienced and I wasn't afraid because I figured out.
• 28:41
  Speaker 2: I resolved my own ignorance, so created Charge Back 911 because, as a merchant, what I wanted is to dial 911 and be rescued from Charge Back Help.
• 28:51
  Speaker 2: And it's one of those crazy stories.
• 28:53
  Speaker 2: After a short time was contacted by the Wall Street Journal, then the New York Times, and the rest is history.
• 29:01
  Speaker 2: Today we have grown internationally.
• 29:04
  Speaker 2: I've spent about five years in London also expanding our location into Europe to the rest of the world, getting into lots of different payment methods so super exciting.
• 29:16
  Speaker 2: And today we also do business with some of the world's largest financial institutions.
• 29:20
  Speaker 2: So I have learned that Charge Backs they're not just an enemy to merchants.
• 29:25
  Speaker 2: Actually, the more education I get, the more ignorance I expose over many years In assuming there's always a victim in the equation.
• 29:34
  Speaker 2: And it's interesting with this particular problem, really everybody is a victim.
• 29:39
  Speaker 2: It's a scenario that just creates damage to every single stakeholder, and on the back of COVID there's amazing opportunities to really create some pivotal movement in the space, so I couldn't be more excited.
• 29:53
  Speaker 3: That's a great story.
• 29:53
  Speaker 3: I'm glad you shared that.
• 29:55
  Speaker 3: I want to talk a little more about Charge Backs, 911 and what you're doing today.
• 30:00
  Speaker 3: When you were on the show a few years ago, have there been I guess it was 2020, you were on have there been changes to the business things you're doing differently?
• 30:10
  Speaker 3: Have you made any major pivots or acquisitions, anything like that, you'd like to mention?
• 30:14
  Speaker 2: So I think probably when I had talked to you, we were in the process of making an acquisition, so we bought a company called Artifacts at the end of 2019.
• 30:23
  Speaker 2: That platform added a lot of synergies to what we do.
• 30:27
  Speaker 2: So we provide onboarding solutions, payout and reconciliation and some reporting tools that can be provided to pay fax.
• 30:37
  Speaker 2: Really, if you look at our core business, as in Charge Backs but what we realized in kind of going upstream and serving financial institutions, the Charge Back data actually intersects with so many different areas in a business that it became really relevant.
• 30:53
  Speaker 2: We want something that allows us to offer modular, quick-fix solutions that help speed up that integration process and really unify the data.
• 31:05
  Speaker 2: So everything we have today is microservices, so that's continued.
• 31:09
  Speaker 2: We probably refactor things every two years.
• 31:12
  Speaker 2: So, like any SaaS provider, always on a path of change, I'd say for changes in the environment, the thing that I've noticed most I mean, here's the crazy thing.
• 31:23
  Speaker 2: I had predicted maybe five years back, even when they announced VCR all these initiatives to help reduce Charge Backs.
• 31:30
  Speaker 2: If you really think of the consumer behavior and I would say I'm a huge student of consumer behavior science, I spent many, many years in statistics and studying this and you have to understand the psychology in payments.
• 31:45
  Speaker 2: If you take a look at creating more efficiency in the Charge Back problem, because that's what the world says they want, that's what a bank says they need we want the process to be more efficient because it's so painful.
• 32:00
  Speaker 2: Well, here's the problem.
• 32:01
  Speaker 2: It's that horrible F word frictionless.
• 32:04
  Speaker 2: When you remove friction and you make things too efficient, volumes grow, and that is a massive issue.
• 32:12
  Speaker 2: If we look at the Charge Back mechanism, this is something that whole infrastructure, the entire process was developed in the 70s for a very, very different world.
• 32:22
  Speaker 2: Total card present, no such thing as Econ.
• 32:25
  Speaker 2: It really hasn't changed that much.
• 32:27
  Speaker 2: The only thing that has really changed is rules Same exact process and almost the same thresholds, but just rules.
• 32:36
  Speaker 2: That's insufficient to be able to cope with the massive change.
• 32:40
  Speaker 2: If you look at what's changed on the front end, you have 3D, secure, you have CVV, you have AVS, you name it.
• 32:47
  Speaker 2: It's changing.
• 32:48
  Speaker 2: We have QR codes, contactless.
• 32:51
  Speaker 2: It's crazy All the different changes that are happening to improve the customer experience and many of them reducing friction and creating more fraud on the back end.
• 33:00
  Speaker 2: So the opportunity or the change that has come with Charge Backs is, if we look at some of the changes that have been made to create more efficiency because it is a very arduous, time-consuming, inefficient process has actually ended up creating more Charge Backs, not less.
• 33:18
  Speaker 2: So we're solving the wrong problem.
• 33:20
  Speaker 2: And then take that and couple that with the effects of COVID.
• 33:24
  Speaker 2: We all knew that Charge Backs would increase and everybody talks about the structural changes from COVID and they're everlasting, ever-changing, ever-growing With Charge Backs.
• 33:34
  Speaker 2: This has really been pinnacle.
• 33:35
  Speaker 2: I think.
• 33:36
  Speaker 2: As an industry, we have to recognize there is no going back.
• 33:39
  Speaker 2: We're not going to shift consumer behavior and you're not going to admire the technology development that has evolved as a result.
• 33:48
  Speaker 2: Consumer behavior has resolved.
• 33:50
  Speaker 2: We have evolved.
• 33:51
  Speaker 2: It no longer matters that per policy with MISA and MasterCard, a merchant just needs to ship their product within a week.
• 33:59
  Speaker 2: No, actually, if you do not ship your product the very next day and it's not delivered at the doorstep of your customer, you're probably likely to receive a Charge Back because the expectation has evolved.
• 34:11
  Speaker 2: There's new standards, and so one is what's written and what's legacy and the other is the reality that we're dealing with.
• 34:19
  Speaker 2: Interesting you, look at COVID, and in order to cope with the volumes of Charge Backs and disputes then, of course, banks had no choice but to create a much more efficient means.
• 34:31
  Speaker 2: File a Charge Back with no questions asked from your cell phone.
• 34:35
  Speaker 2: Go to your website, make a call, click a few buttons.
• 34:39
  Speaker 2: That is now the standard.
• 34:41
  Speaker 2: That expectation is now there.
• 34:42
  Speaker 2: So how do we solve that?
• 34:44
  Speaker 2: And we've seen disputes rise and rise and rise, and they're rising much faster than the rate of card not present payments, even though, if you consider, a card not present payment is 55 times more likely to turn into a Charge Back than a card present payment.
• 35:00
  Speaker 2: However, the thresholds for Charge Backs that manage C&P traffic and card present traffic is exactly the same.
• 35:08
  Speaker 2: There's lots of stuff that needs to be done to create a more fair environment.
• 35:13
  Speaker 2: Charge Backs have evolved to become a compliance statistic, but we have a compliance statistic that is guilty before a proven innocent, that never can get erased, even if the merchant proves that it was invalid.
• 35:26
  Speaker 2: We have the card networks that are stating that up to 70% of all Charge Backs were wrongfully filed.
• 35:34
  Speaker 2: They were a mistake.
• 35:35
  Speaker 2: They're friendly fraud.
• 35:36
  Speaker 2: However, you have merchants and acquires and banks that are taking the burden and paying those fines and fees for all of those invalid cases and we're still operating off of those archaic thresholds and even more recent and even more alarming, if we talk about change, is I hadn't updated our statistics for a couple of years.
• 35:57
  Speaker 2: It's a huge task.
• 35:59
  Speaker 2: We actually had hired a study that was done a couple years back and from our study we had seen Charge Backs are growing at a rate of 23%.
• 36:08
  Speaker 2: E-com is 15%, so it's still completely out of proportion.
• 36:12
  Speaker 2: A massive issue.
• 36:13
  Speaker 2: More recently, mastercard has announced according to their statistics, charge Backs have grown at a rate of 32% in the last year.
• 36:22
  Speaker 2: That is astronomical.
• 36:24
  Speaker 2: And then if you consider the momentum that even Pre-Charge Backs tools have through the likes of Ethica, verify, et cetera, that are very commonplace in the market today, we have a much larger problem.
• 36:37
  Speaker 2: And when I look at the back of the napkin and do the math myself, we're literally looking at these statistics are probably in the realm of 56%, because it's so fragmented and it's a problem that's usually still kind of like that back office send it over there and let them fix it, but it's not getting fixed.
• 36:57
  Speaker 2: So yeah, lots and lots of growth in this space, tremendous opportunities with alternative payment methods.
• 37:05
  Speaker 2: I think charge backs and disputes still the number one unique differentiator for cards today, so I think we're definitely an unprecedented time both for technology innovation.
• 37:19
  Speaker 3: It's super scary but equally exciting what makes your company different from your competitors?
• 37:25
  Speaker 3: How are you helping to solve these problems differently than others?
• 37:28
  Speaker 2: first and foremost and I know I would have answered this even if you ask me two years ago I probably would have said technology and I could still say technology today.
• 37:37
  Speaker 2: I'd say we're light years ahead in technology.
• 37:40
  Speaker 2: But you know, I think the world is changing, I said, to rapids pace.
• 37:44
  Speaker 2: Nobody in business is going to be safe and saying technology is a biggest differentiator because we need to adapt to the fact that that is going to get level set.
• 37:54
  Speaker 2: Really, what it comes down to is relationships, knowledge, intellectual capital, connections.
• 38:01
  Speaker 2: If I look at where the largest platform in the world in terms of both on the connecting merchants to fis and providing the end to end dispute resolution, where the only company that has this is our core competency and we're completely agnostic.
• 38:17
  Speaker 2: So that's definitely competitive advantage and the fact that we operate international and network agnostic is not a small feet as markets are expanding.
• 38:28
  Speaker 2: It used to be unpopular.
• 38:30
  Speaker 2: We would get criticized a bit.
• 38:32
  Speaker 2: Why are you investing into south africa, such tiny little market?
• 38:36
  Speaker 2: What are you doing in korea?
• 38:37
  Speaker 2: There's less and less boundaries and the world is trading at such a rapid pace that I think that's also given us.
• 38:44
  Speaker 2: A great advantage is that we are massively growing in all different regions, the a pack region, latin america.
• 38:53
  Speaker 2: Of course, we have our headquarters in europe, likewise, but I think each of these it's not good enough.
• 38:59
  Speaker 2: I started business in india twenty years ago, spent a lot of time there, and I will tell you there is a massive, massive difference In acquiring a company in another country and considering that that's gonna operate integrate verses actually having boots on the ground and being there from the ground up.
• 39:19
  Speaker 2: It is night and day.
• 39:20
  Speaker 2: So in order to really do business I think international scale you need to understand all the different payment methods.
• 39:27
  Speaker 2: This is becoming more and more relevant.
• 39:29
  Speaker 2: You have to speak all the languages and I'm not talking about stuff that you can get with google translate, but it's more Understanding how things are different with cultures, what's important to people, how human behavior changes the psychology and when it comes to charge backs, this, ultimately, is still a human problem.
• 39:47
  Speaker 2: It's a data problem and it takes a different mindset to solve it.
• 39:51
  Speaker 2: And then, lastly, just on the people.
• 39:53
  Speaker 2: So connections we spent over a decade connecting to the world from c r m's gateways, processors, fraud filters, you name it.
• 40:04
  Speaker 2: We're probably connected.
• 40:05
  Speaker 2: We support hundreds of plugins, file types and connections, and then, when it comes to people, there's not a whole lot of intellectual capital.
• 40:13
  Speaker 2: When you take a look at charge backs because we were talking about this earlier, even before we got this interview it's impossible to go get training in payments.
• 40:22
  Speaker 2: Nobody gets out of college and says I can't wait to join payments and whatever they could find, I guarantee it's already an equated useless.
• 40:31
  Speaker 2: And so often times and I can say this with confidence and talking to some of my peers, but sometimes you have to untrain people on things that they think they already know right.
• 40:42
  Speaker 2: Right and the only way that you really get an understanding in the charge back realm is you have to have work there first hand.
• 40:51
  Speaker 2: So we have teams from issuing that are bringing thirty plus years of experience.
• 40:57
  Speaker 2: There's no replacement for that, acquiring likewise merchants, likewise first hand experience in every single one of those avenues in order to solve charge backs.
• 41:07
  Speaker 2: It really is not a secret sauce.
• 41:09
  Speaker 2: What you need all the data and you need to understand what that data means and you need to know how that data interacts.
• 41:18
  Speaker 2: And that's where it becomes a complicated problem, because there's a lot of people that can get access to data, but they don't have all of the data.
• 41:26
  Speaker 2: There's a lot that can get the data, but if you don't know what it means, there's no standards.
• 41:32
  Speaker 2: I mean, as you know, you look from one bank to the next.
• 41:35
  Speaker 2: What someone determines a fraud case is going to be determined by different roles somewhere else with someone determines a win is going to be considered lost somewhere else.
• 41:43
  Speaker 2: There is not any standards and it's so fragmented that learning that language is not something that you can buy your way into.
• 41:53
  Speaker 2: It's humbling for me and I've been here from the very start.
• 41:56
  Speaker 2: I learned something new.
• 41:58
  Speaker 2: I am schooled by our team at least one week.
• 42:02
  Speaker 2: Our motto now is challenge the status quo, and it has been for the last few years for a good reason because I have to continuously remind myself.
• 42:10
  Speaker 2: You know what we still don't know enough.
• 42:12
  Speaker 2: We have to continue to challenge the way that we think about how to solve a problem, and it's one of the most challenging things in payments.
• 42:22
  Speaker 2: Everybody in payments and I can say this for myself as well we look at solving a problem and most of us say this is what I want done.
• 42:30
  Speaker 2: I want to solve this problem.
• 42:31
  Speaker 2: I want these ten steps automated.
• 42:33
  Speaker 2: I want these ten steps to take me five seconds.
• 42:36
  Speaker 2: That is innovation.
• 42:38
  Speaker 2: No, that's not innovation.
• 42:40
  Speaker 2: Innovation is you don't need those ten steps at all.
• 42:43
  Speaker 2: You need one different step.
• 42:45
  Speaker 2: That is real innovation and that takes a lot of understanding, that takes deep knowledge and it takes guts to actually be willing to exercise all those different models to figure out how you can achieve something better.
• 43:01
  Speaker 2: I'm passion.
• 43:02
  Speaker 2: I think, last but not least, you know you can have great teams and great talent, but I think we've done incredible job and I have to give credit to my whole team is definitely not me.
• 43:13
  Speaker 2: I take credit for them all the time.
• 43:14
  Speaker 2: What you know, they are the most passionate team that constantly inspire me to come to work.
• 43:21
  Speaker 2: Every single day, I dream about charge packs there there as well.
• 43:24
  Speaker 2: So we care about solving a problem, add value and changing the world, as funny as it seems, just with charge backs and disputes.
• 43:33
  Speaker 2: Those are things that definitely, I think, make us unique and allow us to add a bit more value.
• 43:39
  Speaker 3: One final question where do you see the payments industry heading in the next save three to five years?
• 43:46
  Speaker 2: Man, the payments industry as a whole.
• 43:48
  Speaker 2: Talk about roles getting blurred right.
• 43:51
  Speaker 2: It seems like every merchant is becoming an FI.
• 43:56
  Speaker 2: I think we're going to go through a bit of a bubble.
• 43:58
  Speaker 2: To tell you the truth.
• 43:59
  Speaker 2: I think it seems like we're kind of going through this phase where everybody's looking at how green the grass is and how they can cut costs and they can do things this other way, whether they're going to become a pay fact, they're going to become their own issue or they're going to get into payments.
• 44:15
  Speaker 2: This is like the new exciting place to be, and it's fintech, it's exciting.
• 44:22
  Speaker 2: But I think the UK has kind of done a great job on this.
• 44:26
  Speaker 2: Right.
• 44:26
  Speaker 2: They've come up with one of the most challenging set of regulations and rules kind of ironic, because it's almost like it's no set of regulations rules.
• 44:36
  Speaker 2: So they call this consumer duty and effectively the reason why it's so challenging is because they've recognized we have no control over what's going on in payments and actually, whatever we put in place to help regulate and create policies, we just don't even know if it's going to be relevant because things are moving at such a rapid pace.
• 44:55
  Speaker 2: So we're going to institute this consumer duty policy, in which case cardholders are consumers and merchants are consumers, and so if you serve either, then you need to create your own policies, your own protocols.
• 45:09
  Speaker 2: What are you measuring to ensure that you have KYC, that you're being compliant and that you're improving the customer experience?
• 45:16
  Speaker 2: And really it's like okay, take the whole problem and then throw it back in the industry and say you guys are the experts, tell me how you need to do it.
• 45:26
  Speaker 2: And now that's the new regulation.
• 45:28
  Speaker 2: So, it's frightful, but I think we're going to.
• 45:31
  Speaker 2: Definitely there will be lots of change in regulation in privacy.
• 45:36
  Speaker 2: Open banking, I think for a while we've seen the rest of the world has a tendency to move in the footsteps of the US, but in payments, I think we're going to see the US starts to move in the footsteps of what's going on in Europe.
• 45:51
  Speaker 2: There's a lot of movement around all the different alternative payment methods.
• 45:56
  Speaker 2: I mean we're seeing BNPL start to take shape.
• 45:59
  Speaker 2: Cdbc, I think, is going to become more and more relevant.
• 46:02
  Speaker 2: I know it's already getting talked about.
• 46:04
  Speaker 2: It's a lot more talked about in other countries, but I think in the future we'll definitely see and hopefully.
• 46:10
  Speaker 2: I guess that hopefully there will be more data sharing and my goal is that the industry becomes a lot more collaborative and we really join forces to democratize fraud data.
• 46:25
  Speaker 2: I think that ultimately has to happen.
• 46:27
  Speaker 2: It's currently a pain point that affects every single stakeholder and there's quite a few cottage industries that just efficiency and transparency will continue to evolve and we'll see a lot of change in our future, probably some ups and downs, for sure.
• 46:46
  Speaker 3: Monica, thank you so much for sharing your story today and talking about the industry and about chargebacks and fraud.
• 46:52
  Speaker 3: I know they're all very hot topics and very important to our industry.
• 46:56
  Speaker 3: I know your time is very valuable, so I really do appreciate you being here.
• 46:59
  Speaker 2: Thanks, greg, have a good day.
• 47:01
  Speaker 3: I hope that all the listeners out there.
• 47:02
  Speaker 3: I thank you for your time as well, and until the next story.
• 47:05
  Speaker 1: Thank you for joining us this week on the Leaders in Payments podcast.
• 47:09
  Speaker 1: Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 47:16
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