Declined transactions explained + Disputes covered. By Rehman Baig with FlexFactor

Konstantin Dubovitskiy
Rahman Beg, the chief product ofcer of fexfactor. And in this episode we are going to talk about, well, a lot of
things, but mainly we're going to focus on the transaction declines, not sufcient funds r codes, disputes and how
those disputes are handled. The mystery box shall be uncovered. And yeah, let's start it easy. Roman, tell us about
yourself and about FlexFactor.
Rehman Baig
Yeah, thanks for the opportunity to speak today. So my name is Ramon. I've had the pleasure of working at the
frontier of fntech for the past decade. And so I've had the opportunity to lead global teams at great companies like
adyen Square and PayPal. And currently I'm CPU at FlexFactor, as you mentioned. And what I love about FlexFactor
is that it continues that theme of being on the frontier of fntech. FlexFactor is in the business of rescuing payment
declines in real time seamlessly. And the idea here is that we believe that every e commerce business on the planet
has about a 10 to 15% decline rate varies. It can be higher, it can be lower depending on what happens out there.
Rehman Baig
And we think in general about a third of those declines are actually false declines predicated on the belief that issuer
risk models are imperfect. The acquirer processing setups, yes, they're all ISO standard, but they're also imperfect.
Merchants send imperfect information. And so the idea here is that if we can step in, use our AI to evaluate it in real
time, we can step in to rescue the transactions that have declined so that a consumer, whether they're buying a
product like a pair of shoes or they're on a subscription and they're getting a monthly delivery of something, we're
able to go ahead and step in and rescue that decline so that it goes through seamlessly the frst time as opposed to
giving that consumer the sorry, your car didn't go through, can you give us something else?
Rehman Baig
Or try a different payment method and just close and convert on the spot. What's cool about that is in my time at
Odyen, what we saw is that over half of card declines would see an abandoned transaction. Specifcally over 60% of
if you declined a payment, the cart was abandoned over 60% of the time. So that's a big gamble to take that says,
hey, should we give them another shot to pay with a different card or correct an issue? Instead we say, hey, send it
over to us. We'll use our AI to make magic happen and close the sale on the spot.
Konstantin Dubovitskiy
It's great, perfect. And that is what we like to hear here. Closing the sale on the spot. But jokes aside, let's talk about
the formal process of the transaction decline. Can you walk us through the fow of who reviews it? Obviously,
machines do.
Rehman Baig
I'm saying yes.
Konstantin Dubovitskiy
Who on whose side is responsible for actually declining the transaction? Who's taking the risk here if the transaction
has not declined and turns out to be fraud? Let's answer those two before we dig any further. Yeah.
Rehman Baig
So let's take just a quick overview of the ecosystem that exists today. So every merchant on the planet that is
plugged into the card networks has an intricate tapestry of providers that help make payments possible. So you have
the ISO, the gateway, the processor. So this could be a worldpay, this could be a stripe, this could be Braintree, or an
adyen that helps process transactions, bring it into the ecosystem. And then there's an intricate layer of banks in the
background that help make things happen, along with Visa and MasterCard. So when a processor gets the
transaction, they send it over the network. It goes to the issuing Spanx issuer processor, and there's a decision that's
made based on the information that's available at the time, as well as some additional information that's
characterized and populated by the. The card networks themselves.
Rehman Baig
They will make a snap judgment or decision based on that information, and it will come back as either a success or
a decline in that specifc case. And usually that's the beginning and end of the story that says, hey, it's done. The
issuing bank said, no. It steps back a couple hops and you see the end outcome there. Some merchants that have
the investment resources and the sophistication to support it will have a second processor which they sometimes
will retry on, or they will skew it up for a retry later if it's a subscription purchase. But, you know, it's overhead and
sophistication that requires a certain level of diligence to apply. The idea here with FlexFactor is that all happens,
right? So you send a payment out, it gets declined, it comes back.
Rehman Baig
But before you show the decline to the consumer, you send it to us as a secondary. And at that point in time, what
we do is we look at all of the characteristics of the transaction, all the characteristics of the card, all the
characteristics surrounding it in terms of also including things like device ID and fngerprint and things like that. And
we're able to make a snap judgment to say, hey, we think this is actually a legitimate payment that was incorrectly
declined. Or it can be solved with any number of factors that we have in our toolkit. And if we think that the answer is
no, you know, that is the case, we will actually respond proactively with an approval back to the merchant. And so
that is effectively to the merchant as good as the bank said.
Rehman Baig
Yes, because the idea here is that we step in and then we will say, hey, we will pay you for, let's say a hundred dollar
pair of shoes that's out there and we will pay you for this. You should ship the product and complete the sale. The
consumer is happy, you're happy, you can make another sale, which is great. On our end, what we do is then we
process the payment on our own payment infrastructure that we have in place for the exact same amount that the
consumer originally committed to paying. But we may change the timing of the payment, or we may change the
routing of the payment, or we may change something about it to help improve the characteristics of the transaction
going through. And so we're able to effectively take that bet and deliver a approval proactively to the merchant.
Rehman Baig
And then we are responsible for the credit risk on the back end to make it happen as well.
Konstantin Dubovitskiy
Lovely. You're taking all my questions. I had a bunch of follow ups as you were speaking and then you answered all
of them. In this case, Flex Factor does take the risk of, you know, essentially underwriting the transaction and then
you settle the.
Rehman Baig
Debts later with the bank.
Konstantin Dubovitskiy
Right. When you said that you sometimes reroute the transaction, how does that look like? I mean, you only have the
customer's credit card information, potentially can do a bank pool, right? Or. Yeah, correct.
Rehman Baig
Yeah, we're not able to do, able, nor are we interested in changing the card or doing anything like that. But as an
example, we could send it over to dev networks, we could change the additional payload information on the account.
Like as an example, if we believe that, hey, this may being declined because suspected fraud, but we're able to give
the IP address a device fngerprint of the consumer. Along with that, we are equipping the issuer risk model with
more information to potentially respond to that transaction more favorably. So it depends on the situation. There's
about a million different permutations that are actually here. But the idea here, regardless, is that we're able to
effectively kind of take every single optimization route and squeeze it to the nth possible degree, simply because
that is our job of we operate wholly on declines.
Rehman Baig
And being able to help legitimate payment transactions go through in a declined environment.
Konstantin Dubovitskiy
Makes sense. Makes a lot of sense. Very interesting structure, which is exactly why you're here. So let's talk about
the other features of FlexFactor. Specifcally on the non card related transaction, one of the things we're talking
about is the not sufcient funds decline, which is generally speaking, pools. Is that correct? I'm assuming you are
also working on that side.
Rehman Baig
No, actually, funny enough, we've experimented with some bank transfer stuff we haven't done as of yet. However,
the insufcient funds or exceeded credit limits right now are the card processing setup that would exist when you're
presenting your debit card or your credit card as part of the transaction. There the idea still applies regardless of
whether it's an achievement or it's a debit card, you know, because at the end of the day, like they're still drawing
from the same instrument, if you know what I mean.
Konstantin Dubovitskiy
Correct. So let's talk about not sufcient funds return codes. And what happens then? Because it's such a frequently
asked question, especially from the customers who deal with the subscription services where they try to pull the
funds, the transaction bounces because there are not sufcient funds. And again, it might have been an honest
mistake where the user just forgot to fll their accounts or it was missing, I don't know, a couple hundred bucks out of
10,000 that they're trying to draw. Right. What happens then? So the transaction bounces back. You look at it, you're
like, okay, the transaction is legitimate, but it shows not sufcient funds. What can fex factor do in this case?
Rehman Baig
Yeah, so there's as part of this, like the model that we've taken place is that remember, to the merchant, we will step
in and give a response in real time, right? So we will give you a response in less than a second afterwards that says,
hey, this transaction is approved or it's declined. And the intention here is that gives us time to operate on the
transaction as we see ft. So we are not under the constraint of, oh my God, like the consumer sitting at their, what's
it called, their computer or their phone, waiting for a response to come back. Like we have time to go in ahead and
operate on that. So in the case of an insufcient funds, there's a couple of things.
Rehman Baig
Sometimes there are insufcient funds, at least in the debit world, where it actually is an incorrectly tagged
insufcient funds. It doesn't happen very often, but it does happen. And so being able to help ascertain that can be
challenging, but it does occur. The other way of thinking about it is, hey, if I add timed into this mix, I'm able to say,
hey, let's pretend Today is Thursday and sufcient funds. But I'm relatively confdent that the consumer will get paid
tomorrow. Friday, August 1, I might say, yep, I'll approve that transaction today. I'm going to give it a try tomorrow,
and I'll wait for it to go through then.
Rehman Baig
So the idea here is there is some aspects and some similarities to what a smart retries or a dunning provider might
do, but the idea is that is only one of the tricks in our toolset. And again, it's running on our infrastructure, not on the
merchant's infrastructure, which is nice because that means you keep your existing bank account or your existing
processing account or MID or whatever it may be really pristine and focused on the transactions that should go
through. And then we can help focus on the decline payments and ensure that, hey, let's say it came back again for
NSF that comes on our bank account or our MID infrastructure, not on yours as well.
Konstantin Dubovitskiy
I see. All right, in that case, let's talk about the retrying process. Every time the insufcient transaction shows up or
transaction shows up as insufcient funds, you try again. But every time you try and it bounces back with insufcient
funds, cold. Does that not cost you money?
Rehman Baig
It does. I mean, that's part of the economic equation that's here that says, hey, like we, our business is not to
hammer these bank accounts or these debit cards or credit cards incessantly because we have to pay fees every
single time that we go ahead and do that. And so what we're trying to do again, is take the thoughtful approach of
being able to say, okay, we've purchased this transaction, we've taken on the risk of it going through because we've
already committed to paying the merchant for it. If we said, let's say, take three swings at bat to make this thing go
through, what are the three shots that we want to take given the information that we have?
Rehman Baig
And so we have to be very precise about this because again, it's our margin, it's our infrastructure that we're pinging
against, whereas everyone else will basically say, yeah, I'll give you a signal to go ahead and try again. And it's cool.
Like it's, you know, you can try on your infrastructure, but again, then the merchant is paying for that. The merchant is
paying for the individual. We try the individual response code and all the other pieces that are here. And so we try to
be very smart and intelligence and have a probability matrix which says, hey, given what we know about this
transaction, this consumer, this, everything, here's how we would our plan of record.
Rehman Baig
And of course, when you do that frst retry and let's say it fails, then you update your plan and you say, okay, based on
the new probability matrix, like, here's what this looks like. And then sometimes, for the most part, our recovery rates
are extremely high. We're able to collect the vast majority of payments within the span of a week or less. But the idea
here is that there are some losses. And the interesting part of our model is we try and be extremely consumer
friendly.
Rehman Baig
So we, let's say it goes beyond like 10, 12 days, we basically give up on it because at that point in time, the cost of
trying to claim against that payment and the kind of like the associated risk of it coming back as a dispute or
something like that along the way isn't worth us recovering it at that point in time. So were very disciplined on what
we actually say yes to upfront. And then we're very consumer friendly to ensure that, hey, we're relatively associated
with the original transaction in terms of the time span that was there to ensure that no one can come back and say,
hey, what is this? I don't remember buying a $100 pair of shoes at Nike.
Konstantin Dubovitskiy
And from there, that was actually my next question, being consumer friendly, which is, what does the consumer see
on that side? For example, they're trying to pay for Nike at their bank or, well, debit card, sorry, essentially by bank,
they don't have enough funds. You believe that their paycheck is coming in tomorrow. Most likely they will have
funds tomorrow. You are the one covering the transaction. What is seen on the customer statements? Do they see
that the funds were pulled or do they see nothing?
Rehman Baig
Because inevitably the customer statement is the ultimate source of truth. They're going to see something on there.
But the intention is we're able to apply dynamic descriptors and other ways of being able to show that, hey, this was
actually, again, for simplicity, let's say it's a Nike transaction. And that way you're able to go ahead and say, oh yeah, I
did spend a hundred dollars at Nike for this, the pair of runners or something like that. And so that way you're able to
show them the item, you're able to show them the exact price. And in the case of cards, you can also give them
access to the digital receipt and things like that. That then say, oh yeah, I did buy that size 9 pair of trainers and
whatnot. And that helps you then recall the transaction.
Rehman Baig
So there's two ways of Thinking about it, there's the. What is the upfront experience at the time of the decline? The
idea is that it's invisible. It's meant to say, hey, your order is approved, the product is being shipped, the subscription
is being fulflled, whatever that is. That happens seamlessly on the back end on the statement. You are then able to
see, hey, it's like again, in the card case of a card, it would say FF star, the merchant's name and the amount, all the
other identifying characteristic, so that you're able to then tie that back to the transaction that you had in place. And
then we also work with the merchant to ensure that they also get, of course, all the required email notifcations that
say, hey, like this process, and it went through for $100 just as you committed.
Rehman Baig
And so that way we're able to give full transparency to the consumer, but still be as seamless as possible without
introducing friction as part of that process.
Konstantin Dubovitskiy
Dynamic descriptors is something of the news to me. Was not familiar with them. Still am not. But before we jump
into that one, if we do, quick question on the Again, what is the consumer seeing on their statements the day off
when the transaction fails? They actually have not paid the funds. Right. We're saying that you, Flexfactor, is gonna
claim the funds, let's say a week later. Right. For the week. Is there a pending transaction on their statement or is
there nothing at all?
Rehman Baig
Nope, nope, nothing. It doesn't show up. Simply because if they don't, if they have insufcient funds, there's no point
of having a pending charge on your statement. I mean, technically speaking, you could technically put a penny down
and just kind of have that as a hold. But like, practically speaking, we haven't shown that to work very well in our
experience.
Konstantin Dubovitskiy
Interesting. So essentially the customer did nothing or virtually nothing on their statement for a week until they
actually pay for the.
Rehman Baig
Goods that they purchased. Yeah, I mean, practically speaking, we're not going to aim to try to wait for a week simply
because as you can imagine, if we also have an internal policy that says, hey, after 10, 12 days, we're basically to
write it off on our side. It behooves us to try and get to the customer as close to the original transaction as possible,
simply because then you get into a place of like, well, you know, I was going to use those funds for something else or
I forgot that transaction or whatever else it is. And so we want, we got to fnd that balance of like, we want to make
sure that we are delivering a Positive experience for everyone in the ecosystem. The shopper, the merchant, the
payment rail that's being used as well as of course, obviously for us.
Rehman Baig
And the way we do that is by being as close to the original transaction as possible in every way, shape and form so
that we're not necessarily introducing anything that could go the wrong way.
Konstantin Dubovitskiy
Makes a lot of sense. And what happens with the debts that have never been settled? So let's say 12 days, you
decide.
Rehman Baig
To write it off.
Konstantin Dubovitskiy
What happens? I'm assuming you guys are again, we had an interview recently with people who fund companies like
Kalarana who do buy now, pay later solution for them. Even if the amount of transaction is like $24, they still report
that to the credit bureau to affect the credit score of the person who took out this loan for Burrito or whatever they
use the funds for.
Rehman Baig
That's a whole other conversation we can have to be sure. But yeah, so from our side, there's no reporting, it's just
simply a write off on our part. Simply because there's a key difference. When you're engaging with a Klarna or an
afterpay or an afrm or any one of these buy now, pay later, the consumer signed up for an account, the consumer
engaged in a proper setup there that then now from a regulatory standpoint is obligated to be reported to the
bureaus. And so like that is a recent change that came through with the new administration. In our specifc case, we
are acting as a proxy for the original merchant to help their payment go through. And so we are not bound by the
same restrictions or obligations as the BNPLs.
Rehman Baig
And really the focus here is again, we are here as a, you know, the way I've been looking at it recently is this is more
like agentic payments because we offer merchants the fully managed service that says send us the transaction, we'll
respond to you with a done deal service. And then we use our AI technology to be able to then deliver a, you know, a
completed payment on the back end that's all really associated with that original checkout, that original consumer
payment intent.
Konstantin Dubovitskiy
And we go, I see. Delightful. Well, it's a life hack for some people who might want to do some weird stuff. No, I'm just
kidding. Fortunately enough, we only have fntech people here who would not do such a thing of that nature, of
course. Let's, let's talk about. I had a specifc question in mind and then I just bounced out of my head.
Rehman Baig
Damn it. Well, I'LL take your joke for a second. I think to be sure, as part of our obligations. Right. Like we have to,
because this is our payment infrastructure and I do have obligations to like, you know, the banks, to the processors,
to everyone here. You know, we have to underwrite every single one of the merchants that we work with and we
really, we are obligated to verify, hey, they have existing payments infrastructure set up. This is indeed a legitimate
decline that came through. Right. You know, we're doing all the same kind of diligence and checks that a bank or a
processor or whatnot would do.
Rehman Baig
And so it's, you know, as much as, you know, someone that is in a high risk industry would love to work with us, like
we're still very diligent and you know, in terms of what we accept simply because, you know, at the end of the day
we're on the hook for it.
Konstantin Dubovitskiy
Yeah, absolutely. It makes sense. It was one of my earliest questions of are you not incentivized to approve more
transactions than a bank because you're not on the hook?
Rehman Baig
You are on the hook.
Konstantin Dubovitskiy
You are. Basically. It makes a lot of sense. In that case, let's talk about being on the hook for the dispute. So when
the consumer goes into their bank statements, they look at the transaction they made. I don't know, we'll say 20 days
ago, that was approved by you. The funds were withdrawn. But they're like, hey, I actually did not order those shoes.
Nike shoes. Don't, don't know what you're talking about.
Rehman Baig
Yep.
Konstantin Dubovitskiy
Dispute. Usually the issuing bank sides would be consumer. Right. They pull the funds instantly. Since you are the
one who underwrote the transaction, they're going to be pulled from your account.
Rehman Baig
Yeah.
Konstantin Dubovitskiy
What happens next?
Rehman Baig
Yeah, so I mean this, generally speaking, we do work with our merchants to do representment on chargebacks and
so we can show, hey, like the product was fulflled, here's the receipts for their product, like here's everything about
the order to show that indeed it was a legitimate purchase. But again, like there are situations where fulfllment
doesn't happen as expected. Let's say again, if you take a Nike example, I ordered a pair of red shoes and I got a pair
of blue shoes or the size was wrong or maybe the product was defective or something along those lines. And for
some reason there's a certain class of consumer that just likes to be to go to the bank and charge back as opposed
to picking up the phone and the original merchant.
Rehman Baig
So in those cases, of course we pass back the fnancial liability to the original merchant as that happens. But the
negative hit still comes to us. And so that's why we have to be so careful about managing that. Because as you
know, all of the payment networks have ratios and things to consider here as part of the ecosystem and ensure the
integrity of the fnancial payments ecosystem. So we need to be very mindful of what this looks like. And so we do
dispute them. So we do represent these chargebacks. You know, we do share additional information the other day if
the product or service was not given in the specifed time frame or it didn't meet the quality expectations or was the
wrong product or whatever it is. Yeah, we're going to be able to pass that back to the original merchant. Exhaust
there.
Konstantin Dubovitskiy
Makes sense. And were talking about most of the transactions through you guys are for merchants. So say $100
purchase of issues. Right? That's the standard average ticket size. A lot of these processes for the disputes from
what I understand are extremely manual. How do you handle that? Is it worth handling it over a transaction of $100?
Rehman Baig
Well, I think the idea is the vast majority of merchants have now engaged with various chargeback management
services to kind of go ahead and do that and we're no exception in that regard. So we can apply AI to the problem
space to do representment and share, collect the right information, share it in a, like a zip fle or other package back
to the banker, to the issuer to help see that through. Then yeah, that is indeed like what we're going to go do. It's just
a question of, you know, we don't blindly represent every single transaction that did happen, you know, I would say
probably a decade ago and there are a lot of rules that were changed to help avoid some of that overhead.
Rehman Baig
But yeah, based on the information that we have at hand, if we think we have a shot, we'll present a compelling
package and we'll do it using AI. If sometimes we just have to accept it because that's just the nature of the
information we have. And so it's a delicate game that I'm happy to say that AI has made this much easier to stay on
top of versus the old world where you have to have a feet of analysts that are expected to respond.
Konstantin Dubovitskiy
At least the good old chargeback disputes were God awful, atrocious creatures. Still are. But shout out to AI at least
that's doing something useful here. That's good to know. In that case, let's talk about numbers again. We have a lot
of listeners who I bet are Interested in Flex Factor again, it's a universal issue. Who should be reaching out to you
right now? I'm assuming it shouldn't be a store that is selling 10 pairs of shoes per month. What's your ideal
customer?
Rehman Baig
Yeah, so the cool part about it is we've been at it for about two years and we've built a coalition of partners that
believe in the vision and believe in the service offering of what we've been able to offer here. And so depending on
what your either your payments provider is or your commerce provider is or your orchestrator is, you may already be
relatively pre connected into us. Right. So we have partnerships with great orchestrators like Spreedly, payment
providers like Stripe or Braintree, and there's a whole host of others on our website. And the idea here is if you are
falling into one of those categories, you can click a couple of buttons.
Rehman Baig
Maybe in the case of Spreely, you might have to write a few lines of code, but you're already used to doing that with
Spreely and boom, you're ready to go live with us relatively quickly. What's cool is we just launched, we announced
the partnership with Valor PayTech which works with a lot of small businesses across the United States. And so in
that case, like again, natively on the terminal that's offered to payment to. Sorry to merchants, it will route to client
transactions to Flex Factor to help again close additional sales and make them go through. So I think the idea is like
fnd out a if you are on a compatible platform for us. If not still reach out to us.
Rehman Baig
We can gather information and we can work with your provider to ensure that they include us as part of the mix,
which makes your life a lot easier. If you're a larger merchant then at that point in time, of course reach out to us and
we do support direct API integrations. It can be done.
Konstantin Dubovitskiy
Delightful. Quick interjection. Did you say that FlexFactory has only been around for two years?
Rehman Baig
Yeah, I mean probably we, I would say maybe two and a half, three years in total, including about a year of building
and development up front. But yeah, we're relatively new in the grand scheme of things. And the idea here is we are.
The funny part is as we have conversations and I've been through this kind of growth cycle at a couple different
companies when we frst start a of course, like, you know, as a new brand, you don't have the cachet to be able to
say of course these guys have, you know, fgured it out. But we're able to Come in and talk about our story. And one
of the earliest questions we get is like, wait a second, like, how are you guys able to do this when no one else is able
to fgure it out?
Rehman Baig
And the idea is, well, there's a. There's a lot of parts of getting this right, but you have payments expertise, but you
also have credit risk modeling expertise. And being able to put those two together to operate on declines in real time
is something that historically, like, could you do it? Potentially. But with the advent of AI, we're able to do this 10x
better, 100x better than we ever could, and able to return responses way faster than ever possible. So that's the idea
here of, you know, we've been at it for just a span, for about 2 and a half years in total. And that allows us to really
move quickly and to help make things happen from there.
Konstantin Dubovitskiy
That's crazy. I just assumed that you were around for 10 years. Ish.
Rehman Baig
I mean, like I said, one of those things. It's built on the experience of decades. But yeah, the company itself is
relatively new.
Konstantin Dubovitskiy
That is insane. And I will be following along, be able to claim that I've met them when they were still young. So.
Looking forward to that. Very much so. In that case, last couple of questions. Number one, pretty much every
product of yours requires or involves foating the funds out for at least a couple of days. How much capital do you
have tied up? And it's okay if you can't share specifc numbers. How much capital do you have tied up in the foating
process? Let's put it that way.
Rehman Baig
Yeah, I mean, I think it depends on the nature of the agreement. So we have a fexible funding schedule that
ultimately is tied to every contract that we have with the merchants that we work with. And so the specifc amounts
of capital, for the most part, we tend to try and line it up tightly in terms of, you know, the amount of how long it
takes us to collect a payment from a transaction to how often we pay out to a given merchant. And so for some
large enterprise merchants, we have them paid out on a daily schedule, just like they would expect from any payment
service provider. For some smaller merchants that are maybe providing digital services that have higher margins, we
will pay them out less frequently. So I think it really depends on the situation that's here.
Rehman Baig
But for the most part, we raised a Series A from Bessemer, which is a great VC frm and they have been a
phenomenal partner along the way. And so we're extremely well capitalized. We run an extremely Efcient operation.
And so the idea here is we don't have to have a massive debt facility with a series of banks to help make this
happen. We're able to kind of fnd.
Konstantin Dubovitskiy
There is a question easily makes a lot of sense. And I cannot believe how fast you've developed this. It is insane. The
amount of connections that were made, the tech behind it, the banking relations is crazy as with a lot of experience
and there's a, it's, it's.
Rehman Baig
Been, it's been a fun ride simply because, you know, at the end of the day we have to go to every single bank and
processor and justify, you know, how we can do what we do. And it's been interesting because this is again a model
that historically hasn't existed effectively. The way we call it now is dynamic merchant record where we can step in,
you know, dynamically and take on the MOR construct and, but series of a payment perspective. And that allows us
to, you know, again step into the transaction and process the payment and capitalize on the consumer's payment
intent. Like that's a relatively, that's a brand new model that effectively we invented.
Rehman Baig
So in that regard, being able to help, you know, justify this and put together the policy house and the monitoring and
the oversight and whatnot has been a rollercoaster ride of being able to help build this, you know, fast enough and
capable enough to really, you know, maintain control while we help expand our partnerships. Every day there's a new
partnership coming online. So it's exciting and we're excited to see where this goes over the course of the next two
years. We think this is one of those things that people will expect and will demand processors that hey, like what?
Like it's cool that you have these internal optimizations that you've done historically, but most processors haven't
really been held to account to really drive outperformance when it comes to declines.
Rehman Baig
And now all of a sudden if we provide a viable option now you have to go in and say hey, like this is an expectation,
not just a nice to have 100%.
Konstantin Dubovitskiy
And that is why I'm very excited that I met you guys early on. Shout out to Brandon who introduced us in that case.
We've covered a lot of great stuff. Very excited about all the things that we discussed today. Let's, let's come to the
wrap up question, shall we? The main wrap up question that we asked pretty much or not pretty much, but literally
every single guest speaker here is the education that you want to place in heads of everyone in the world. So if you
could whisper something into everyone's mind, 8 billion something people in this planet, what would it be? It has to
be something about payments. Recommended to be about payments.
Rehman Baig
It doesn't have to be, of course. Yeah. I think the idea here is when it comes to your level of the connection that you
have with your payment processor there, the amount of times even for large enterprise merchants that we see really
like not perfectly optimized setups that are leaking transactions is staggering, you know, and so at the end of the
day, your processors can only do what you send to them. They can operate only on those. And you have to hold your
processors to account to then operate on that information in a way that's intelligent and that delivers
outperformance for your business. And so if you can help, you know, identify and audit your connection to your
processors, and then, of course, then hold them to account to deliver, you're already ahead of the game, which is
fantastic.
Rehman Baig
And if everything else we work with us and we offer that fully managed service that is able to, again, simplify your
infrastructure so you don't have to have 50 different payment processors to optimize against. We're able to help
manage that on your behalf. And again, it's our payment infrastructure, so it makes it super easy for you to take
advantage of. So that's the moral of the story. Work with your processors, really audit the data, fgure out what
makes it moves the needle, and make it happen.
Konstantin Dubovitskiy
All right, now, 8 billion people are really confused. Let's simplify this from. Let's simplify. Explain it in simpler terms.
All right, I was trying to come up with some cool words to use there. I don't have it. Vocabulary is too small yet, so
simple simplifcation of what you just said so that hold the eight billion people.
Rehman Baig
Okay, well, eight billion people, yeah. So, hey, payments is not a trivial matter. Payments may be an area that is just
an end of getting things done, but the information that you send to your payment processor, like IP address or
characteristics about the transaction order information, all of that stuff that helps your payment processor make a
difference when it comes to your approval rate. So work on that and hold your processor to improve your approval
rate with that information and hold them to account on that one. And so that's the whole story here.
Konstantin Dubovitskiy
Now 8 billion people are like, oh, damn, that sucks. I'm not in payments or say that.
Rehman Baig
Yeah.
Konstantin Dubovitskiy
The other 0.01% are ecstatic because it's great stuff. Absolutely love it. This is a great point for us to wrap it up. As
always people, check out the description of this episode. I'm going to include Ramon's LinkedIn. I'm going to include
Flex Factor. So if you want to see a journey of an epic company all like FlexFactor. And by the way this is not
sponsored but could be this. This is a commercial organization. We are sellouts. So if you do have something cool
and you would like to pay us money to be here, you're welcome. But FlexFactor is not one of them. They are just here
because it is an actually genuinely cool solution. That was very excited to learn about and I am so glad that Roman,
you took your time to do so. So people, check out the description of this episode.
Konstantin Dubovitskiy
There are going to be links there. There's going to be a link to a post I made on Substack that is about ach disputes
actually. So check it out. A lot of useful information and as always have a good day.
Rehman Baig
I appreciate it. Thank you.