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Saturday, Sep 30, 2023

50 Fastest Growing Private Companies 2017: Payscout Inc.

Sherman Oaks CEO: Cleveland Brown Growth Rate: 329% As e-commerce has gained more traction with consumers, doors have opened for software developers such as Payscout Inc. that make online payments possible. At only six years old, the Sherman Oaks company has inserted its e-commerce payment processing software into emerging markets such as Brazil and China; it’s partnered with key credit card companies including Visa Inc., it counts Chinese e-commerce powerhouse Alibaba Group Holding Ltd. among its customers and it’s pushing the digital transactions envelope with software that allows consumers to buy items in a virtual reality setting. Such landmarks have helped push Payscout’s revenue to climb 329 percent over the past two years to just over $24 million – a pace that has propelled it to the No. 3 spot on the San Fernando Valley Business Journal’s Fastest Growing Private Companies list this year. The company also has earned places on Inc. magazine’s 5,000 fastest-growing private companies, and among the 500 in prior years. This year it ranked 521. Such a positive uptick came from Payscout’s effort a few years ago to sharply define which customers it would pursue, the partners and vendors it would build relationships with and the types of employees it would hire, said Cleveland Brown, Payscout’s chief executive and co-founder. “When you have rapid growth, and you put that in your vision, that means your decisions are going to outpace the process,” Brown said. “It (also) enabled us to communicate effectively so we’re speaking the same language when we make decisions. That really helps us when we’re moving rapidly because it’s easier to make and absorb decisions.” Global focus Payscout’s roots are both domestic and international. Brown was already building e-commerce software abroad when he met Payscout’s co-founder, Manpreet Singh, who built payment software applications for public schools in the U.S. Their first project together – before officially starting a company – was for the L.A. Unified School District. The pair developed software that created a “frictionless” payment system for the district’s internal and external purchases. Frictionless, an industry term, refers to minimizing the steps consumers take when paying for something. The pair decided to form a company in 2011 in the post-Great Recession era when retailers began asking for less risky payment methods, e-commerce began to take off globally and financial institutions began integrating e-commerce into their applications. They decided to focus Payscout on software for global e-commerce. “Through that demand, Manpreet and I said, ‘I have the solution on the international side. You’re managing on the domestic side. Let’s put these together to have a holistic solution.’” Payscout is just one of many online payment processing software companies that has emerged and seen rapid growth in recent years, according to the L.A. market research firm IbisWorld. The $20 billion industry “grew tremendously” since 2012 – more than 7 percent overall – as household disposable income grew and shoppers got more comfortable with purchasing online, the firm writes in an August report. When Payscout got serious about growth, it focused on pursuing customers that were entrepreneurs and global e-commerce innovators. To get there, the company aimed to build software to operate in more than 100 countries, and opened offices in Sao Paulo, Shanghai and the Republic of Malta. “More and more people are demanding products and systems that have to be able to have that global process,” Brown said. “Particularly, China is pressing forward, and Brazil is pressing forward, because there’s more consumption there.” Second, Payscout sought to integrate regulations governing payment processing into its software – one of the bigger growth drivers for the company, Brown said. Payscout then focused on security, and built its own platform to protect consumers’ payment information and integrated that into its software programs as well. It did this rather than outsource the task, Brown said. “I think the fact that we have an end-to-end solution – that is attractive to businesses,” Brown explained. “Each layer you add that you outsource – and then who are they outsourcing to – you have these multiple points of vulnerability to your payment processing, and you want to eliminate as many of those as possible.” Disruption Virtual reality is still considered a nascent technology – although some industries, such as residential real estate, have been pushing its use. Last year, Payscout debuted a virtual reality payment processing platform, and in June, created software for a retailer, Body Language Sportswear, in Commerce and Sherman Oaks. To buy in the retailer’s virtual environment, shoppers don Google Cardboard goggles and download Payscout’s free software from Google Play, enter its virtual reality showroom, view the athletic apparel on virtual models and pay using a credit card. “This has opened up partnerships for us, that for a company our size, (we) fundamentally didn’t have access to,” Brown said.

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