The Executive Interview Series provides readers with exclusive insights from movers and shakers in the payments industry. The Payments Industry is under continuous transformation, as such this series provides diverse perspectives on everything from strategy to payments technology and to the future of the industry.
In this interview, TSG’s Market Intelligence team member Alex Ferguson sat down with LegitScript CEO, Scott Roth to learn how his company makes the internet and online payments safer for businesses and their customers.
Background: Scott sets the strategic vision of LegitScript, oversees day-to-day operations, and ensures the ongoing business performance of the company. Prior to joining LegitScript, Scott was a CEO of Jama Software, a leading product development and risk management platform for companies building complex and highly regulated products. Over the course of his 20+ year career, Scott has held several leadership positions with high-growth SaaS, internet, and data companies such as Salesforce.com, ExactTarget, and Return Path. He is a committed volunteer in the Portland community and serves on the board of POIC + RAHS, an accredited alternative high school, youth mentoring, and job training organization.
Q: Alex F.
Tell me about yourself. How did you find yourself entering this monitoring and certification industry?
A: Scott R.
I have worked in enterprise software and software as a service for the past 20 years. I started out my career in sales and marketing roles before moving into management and ultimately becoming a CEO. I have been extremely fortunate to work for some amazing high-growth companies and for some inspirational leaders who helped me grow from a career perspective.
Q: Alex F.
You’ve had an accomplished career over nearly 20 years at several prominent companies such as Salesforce, ExactTarget, and Return Path. How do you feel this prior experience has aided you in your role at LegitScript?
A: Scott R.
Every career opportunity I have had has been an opportunity for significant professional and personal growth. All the companies I have worked for have experienced significant top-line revenue growth. There was a never-ending stream of new experiences that I was able to be a part of — launching new products, raising venture capital/private equity funding, opening offices across the globe, acquiring other businesses, completing an IPO, building vibrant and sustainable corporate cultures, and being acquired. I learned so much from all these experiences. In various ways, every single one of them has played out or will play out in the future at LegitScript.
Q: Alex F.
In your opinion, what has been the biggest challenge in adapting to your role at LegitScript?
A: Scott R.
I would say that there have been two primary challenges.
(1) Joining the company in June of 2020 during the heart of the global pandemic. We made it work, but that was an extremely difficult time to join as the leader of a company, especially for someone who is as relationship-oriented as I am.
(2) Truly understanding the depth and breadth of complexity that surrounds the payments ecosystem and the broader online risk and compliance landscape. I am just over two years into my journey with LegitScript, and while I feel like I have learned a ton, it seems like there is something new to learn every single day in the world of payments.
Q: Alex F.
Tell us more about LegitScript. It’s a pretty unique business model that many may not know of.
A: Scott R.
I often joke with folks that LegitScript is the coolest company you’ve probably never heard of. Our mission is to make the internet and payment ecosystem safer and more transparent, and we do that by partnering with internet platforms, social media platforms, e-commerce marketplaces, and payments companies to help them identify and manage/remove third-party merchants who are engaging in risky commerce on their platform. While we originally started in the world of online pharmacies and healthcare, we now have monitoring capabilities and expertise that spans over 60+ high-risk verticals and over 100+ countries across the globe.
Specifically, within the world of payments, we work with risk-bearing merchant acquirers to help them ensure that their entire merchant portfolio is clear of folks who are processing payments for the sale of illegal or problematic products and services. Lastly, for a few specific high-risk verticals, we have created industry-recognized certification programs where we vet and continuously monitor merchants to ensure they are who they say they are and to ensure their commercial activities are above board.
Q: Alex F.
Earlier this year LegitScript announced the launch of OneView, a new merchant intelligence platform. Tell us more about OneView and how it’s a gamechanger.
A: Scott R.
As a company, we have always approached delivering solutions to our customers through an intentional combination of proprietary technology, a unique data asset, and an expert team of analysts. OneView is our next-generation technology platform — where we took a step back and are essentially rebuilding our capabilities from the ground up using the latest and greatest technology that is available to us today.
At a foundational level, OneView consists of three things:
(1) a core data platform that houses all our information in a unified modern data lake,
(2) advanced decisioning capabilities such as machine learning and artificial intelligence, and
(3) a modern web user interface and data exchange API environment for our clients to get access to information in whatever way is appropriate for their business.
OneView is a game changer because it will allow our clients to get a more holistic view of merchant behavior across the commercial internet. For example, with OneView our analysts and clients can see merchants who are advertising on one or more social media networks, selling products in one or more e-commerce marketplaces, and processing payments for sales made directly on their own website — all that data will be processed, analyzed, and monitored for elevated risk factors in near real-time. We believe that this view of merchant behavior at the scale of millions of merchants is not only unprecedented but is also something that will deliver immense value to every single one of our clients over time.
Q: Alex F.
In addition to monitoring and certifying payment processors, LegitScript markets expertise in over 60 high-risk verticals. Does the approach in offering monitoring and certification services vary significantly from industry to industry?
A: Scott R.
Staying on top of all the changing regulations, trends, and fraud techniques of bad actors in over 60+ high-risk verticals and over 100+ countries is not only a massive challenge that we face but also a huge passion of ours! We live and breathe this stuff so that our clients don’t have to. There are a lot of similarities in the frameworks that we leverage when doing work across the different verticals. As you can imagine, none of them are the exact same. Healthcare, firearms, intellectual property, adult content, tobacco — the United States, Brazil, China, Nigeria, Germany — they are all so unique. We absolutely geek out on figuring out how to map the entire landscape and apply the proper compliance and risk management approach to each one.
Q: Alex F.
Credit card fraud and other nefarious activity across the web were reported to have largely increased since the onset of the COVID-19 pandemic. What kind of high-level fraud trends have you observed at LegitScript over the past couple of years?
A: Scott R.
You name it, we’ve seen it, and are continuing to see it in significant volumes. Sadly, bad actors are active in good times, but they are really active in bad and uncertain times. With the global pandemic, political/social unrest, and looming economic challenges ahead we continue to see an alarming rate of bad actors. They are trying to take advantage of consumers. COVID test/clinic/vaccine scams, faulty and counterfeit personal protective equipment (PPE), non-delivery scams, financial/cryptocurrency scams, fundraising scams, hate/harm speech, misleading claims, and political disinformation are just a few of the things that have spiked and are still happening a lot over the past couple of years.
Q: Alex F.
What’s next for LegitScript? Where do you see LegitScript five years down the line?
A: Scott R.
I see us staying true to our mission of making the internet and payments ecosystem safer and more transparent. But doing this in new and different ways than we do today. While we love helping our clients remove the bad stuff that already exists on their platform (and the need for this will never go away). We are much more interested in identifying and stopping bad stuff from getting onto the platform in the first place. The world of merchant risk and compliance is one that is constantly evolving. We believe that we are well-positioned to help more companies across the globe keep their platforms safe for consumers and merchants to engage in productive commerce.
Speaking of, you know how it seems like there is a “national day” for everything — chicken wings, red wine, etc.? We officially have declared December 1st as Online Risk and Compliance Day. Each year we will be gathering to celebrate the vital work of merchant risk & compliance and trust & safety professionals around the globe. Anyone can join us for a complimentary full day of education and inspiration by registering at https://onlinercday.com/.