Technology Leader of the Month: Scott Bauer, CEO, Mosaic Processing 11-13-25

Summary

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Becker Business Podcast: Technology Leader of the Month

Episode: Scott Bauer, CEO, Mosaic Processing
Host: Scott Becker
Date: November 13, 2025

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Episode Overview

This episode features Scott Bauer, CEO of Mosaic Processing, as the Technology Leader of the Month. The conversation centers on innovations in credit and debit card refund processing, targeting high-risk merchants, and how economic conditions influence returns. Scott Bauer shares insights on both the evolution of his career and company strategies—addressing current marketplace challenges, fostering trust, and leadership values essential for thriving in a competitive fintech environment.

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Key Discussion Points & Insights

1. Scott Bauer’s Background and Mosaic Processing’s Origins

• [00:36] Scott Bauer introduces his 35-year career in financial markets, transitioning from trading floors to fintech solutions as industries digitize.
  • Quote:
    “Change of landscape in the markets over the last, you know, 15 or so years where everything has pretty much gone electronic... many people like myself have kind of diversified.” — Scott Bauer ([00:49])
• Mosaic Processing focuses on reducing the cost of credit and debit card usage for both consumers and merchants, with particular attention to chargebacks and refunds.

2. What Mosaic Processing Does Differently

• [02:09] The company specializes in serving high-risk merchants (e-commerce, e-gaming, nutraceuticals) who face exceptional refund rates and punitive fees from major credit card networks.
• New Visa regulations (VAMP) mean merchants exceeding a 1%-1.25% refund rate face steep penalties or may have to stop accepting cards altogether.
• Product highlight: Quick Refund
  • Integrates seamlessly into merchant systems (two-minute install).
  • Processes refunds instantly without passing through Visa, avoiding "penalty box" rates.
  • Substantial fee reduction: Flat $10 per transaction vs. $30-$60 through standard networks.
  • Quote:
    “If a consumer comes back and wants to make a refund, the refund happens seamlessly without ever getting to Visa... the fee they pay for a refund, which can be upwards of, literally, and this is ridiculous, upwards of 30 to $60 per transaction... They pay a flat $10 fee with us.” — Scott Bauer ([03:28])
  • Benefits consumers with instantaneous refunds, vs. the typical 3-5 day wait.

3. Economic Factors Increasing Refunds

• [05:22] Discussion of a "K-shaped" economy, where wealth disparities impact consumer behavior.
  • Economic hardship leads to higher levels of returns—impulse buying online, buyer's remorse, or parental intervention in purchases.
  • Quote:
    “When we get into a period like this... you do see a higher level of refunds. Because a consumer may buy something... then they look at their credit card statement [and] say, ‘I really don't need this.’” — Scott Bauer ([05:44])

4. Impact of Return Fees—Realities for Merchants

• [07:17] Average transaction size for customers using Mosaic is $17, but traditional refund fees ($30–$60) can wipe out margins on low-ticket sales, forcing merchants to increase prices or add surcharges.
• Mosaic’s offering cuts fees by 60–70% and provides merchants with actionable transaction data to improve business decisions.
  • Quote:
    “The merchant is absolutely loving this... Their fee is cut by 60, 70%.” — Scott Bauer ([08:30])

5. Keys to Growth in a Competitive Environment

• [09:15] Success comes from being deliberate rather than rushing, focusing on perfecting one product at a time before expanding.
  • Building relationships with clients and independent sales organizations (ISOs) is fundamental.
  • Quote:
    “It’s that old adage of walk before you run... we have been very deliberate in our process building up the business one product at a time.” — Scott Bauer ([09:30])

6. Leadership Philosophy and Team Culture

• [11:11] Emphasizes the importance of continuous learning, not being afraid to make or admit mistakes, and fostering transparency within the company.
  • Leaders should avoid overpromising and ensure the customer always leaves with a positive experience.
  • Quote:
    “If you don’t investigate, if you don’t continuously learn, if you don’t try things, you’re never really going to reach that next level... owning up to [mistakes] and taking care of it and making sure that your customer is righted.” — Scott Bauer ([11:20])
  • Culture: Flat hierarchy, everyone is on the same level, focus on communication and trust.

7. Mosaic’s Core Values: Trust and Communication

• [13:04] Mosaic is built on a foundation of trust and transparent communication, stemming from the backgrounds of both Scott Bauer and partner Mike Frazen.
  • Confidence in integrity is a major draw for clients.
  • Quote:
    “The one constant is trust and communication... Anybody that we work with can feel confident from the first second that they will always get the utmost transparency, the utmost truth.” — Scott Bauer ([13:10])

8. Closing Remarks: Leadership Validation

• [14:05] Host Scott Becker comments on the integrity of Mike Frazen:
  • Quote:
    “As good a person as they come, the highest integrity... The people that I know that have had long term business relations with Mike rave about what a person he is.” — Scott Becker ([14:14])

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Memorable Quotes

• On Market Change:
  “Change of landscape in the markets... everything has pretty much gone electronic...” — Scott Bauer ([00:49])
• On Visa Penalties:
  “If a consumer comes back and wants to make a refund, the refund happens seamlessly without ever getting to Visa...” — Scott Bauer ([03:28])
• On Economic Impact:
  “When we get into a period like this... you do see a higher level of refunds.” — Scott Bauer ([05:44])
• On Building a Business:
  “Walk before you run... we have been very deliberate in our process building up the business one product at a time.” — Scott Bauer ([09:30])
• On Leadership:
  “You can’t be afraid of making a mistake... you can’t be afraid to admit a mistake.” — Scott Bauer ([11:11])
• On Company Values:
  “Our company is built on trust... trust and communication... are really the two biggest values.” — Scott Bauer ([13:10])

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Timeline of Key Segments

• [00:36] – Scott Bauer’s introduction & company overview
• [02:09] – Mosaic’s product and its industry impact
• [05:22] – Refunds, economic trends, and consumer behavior
• [07:17] – Merchant pain points and financial benefits of Mosaic
• [09:15] – Growth strategies in fintech
• [11:11] – Leadership principles and team culture
• [13:04] – Core company values: trust and communication
• [14:05] – Integrity and partner praise; closing remarks

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This episode delivers a deep dive into fintech innovation, merchant pain points, and values-driven leadership, making it valuable for anyone interested in payments, entrepreneurship, or navigating today’s economic challenges.

Transcript

[A]

This is Scott Becker with the Becker Private Equity in the Becker Business podcast. We're thrilled today to feature a leader as the technology leader of the month. We're joined today by Scott Bauer. Scott's the chief executive officer of Mosaic Processing and he's going to talk about what they do sort of in what I would call the financial technology space, the credit card space, and more. Scott, so glad to have you with us. Can you take a moment and introduce yourself and tell us a little bit about yourself and about what Mosaic Processing does?

[B]

Absolutely. Thanks so much for, for having me, Scott. It's really a pleasure to be here. I've been in the financial world professionally since out of college, 35 years, mostly as an active trading professional down on the trading floors in Chicago. My background is really in the market. So, and as we know, you know, change of, change of landscape in the markets over the last, you know, 15 or so years where everything has, has pretty much gone electronic, although there is still live trade in Chicago. And I am down on the trading floor almost every day. But because of that shift over to the electronic world, you know, many, many people like myself have kind of diversified. And so one of the things that, that I am doing is, is in the finance space, but it is in the chargeback space using credit and debit cards processing. So Mosaic Processing is, is a company that we started that's dedicated to providing the best products to reduce the cost of using credit and debit cards. And that is both on the consumer side and the merchant side.

[A]

And so talk about how you do this. Do you work with the other big credit cards? Is it your own credit cards or is it just the back office end of it? Explain to us more about what Mosaic does and what makes it makes its approach distinctive.

[B]

Sure. So we really want to reach out to high risk merchants. High risk merchants, meaning mainly E commerce sites that, that are in the E gaming or E sports betting, Nutraceuticals. Merchants that have a high risk of refunds. And that doesn't mean that that that business is, is not a profitable business or a bad business. It's just that that's the nature of their business. And what happens is companies with a high level of refunds and typically when you get to about one to one and a quarter percent of transactions that are refunded, a merchant starts to get hit with just an exorbitant amount of fees from Visa. And eventually, and this is happening now because of a rule that Visa just put out there called vamp. Eventually many of these merchants are likely to go out of business or not accept credit cards at all. So we have a product called Quick Refund which is a seamless integration into any merchants processing system. It's on the back end. Consumer doesn't see it. It's not consumer facing. The merchant doesn't even see it. It's literally a two minute install that if a consumer comes back and wants to make a refund, the refund happens seamlessly without ever getting to Visa. So that level of being in the penalty box of the one to one and a quarter percent transactions that are refunds basically disappears. So not only does a merchant not only have to worry about getting in the penalty box, the fee that they pay for a refund, which can be upwards of, literally, and this is ridiculous, upwards of 30 to $60 per transaction. Even if it's a $2 transaction, that is what the costs can be for a merchant to process a refund. They pay a flat $10 fee with us. So on the merchant side, twofold, they're getting out of the penalty box and they're saving 60, 70% on the refund transaction. On the consumer side, Scott, you know that if you go return something to wherever it is, you're going to get a notification that says, okay, your refund's been processed, it'll show up in your account in three to five business days, whatever it might be. This is an instantaneous transaction. So for the consumer, that refund shows up in your account instantaneously.

[A]

So that's fantastic. And talk for a second. You know, we've sort of got a challenging economy at different levels, you know, and it's a very complicated economy because those who own lots of assets are doing fine, but then 40% don't. They're really struggling. When the economy struggles, do we end up in a spot where there's more returns? And particularly for people that have high return volumes, do those get more and more in a tougher economy? Any thoughts there?

[B]

Oh, there's no question about it. And you know, you hit the nail on the head. We are in what's called, you know, kind of this K shaped economy. K shaped meaning that the upper level demographic, let's call it, they're doing fine, as you said. So you know, kind of that tail on the K going up, that's the upper end, the bottom end, unfortunately of the consumer is not doing well. So when we historically, when we get into a period like this and you can, you know, go through economic cycles basically for the last 50 years, you do see a higher level of refunds. Because a consumer may buy something and then they kind of look at their account, they look at their, their, their credit card statement say, you know, I really don't need this. So there's no question about it. And in this world of E commerce, especially where transactions done online are setting records daily and, and there is so much impulse buying, right, Whether, whether it's through, through Amazon, whether it's through any gaming site. You know, one of our kids is, is playing a game online and they buy some more swords or they buy, you know, whatever it is, and then a parent looks at that and says, oh no, no, no, no, you know, we've got a refund that those refunds definitely tick up. So this is extremely beneficial, especially in this economy.

[A]

No, that's fantastic. And what's the reception you're getting from customers? How excited are they about this? And I think most of us, if you're not a merchant, don't realize how bad those return fees are. Talk about that. How aware are your merchants of the return fees? I take it to quite aware. So if you have a business with lots of return fees, that must be just devastating, particularly if you're not selling big items. If you're selling a $2,000 item, six hours might be fine, but they're selling a $200 item. That's brutal.

[B]

Well, it's, it's interesting you ask because the average ticket item for the processing, the refunding we're doing is $17. So you can imagine if someone is returning something $17 and it costs the merchant anywhere between 30 and $60 to actually process that refund. Those fees obviously are getting passed through, through to the consumer. Either pass through in. You know, you may see a sign which is so prevalent now where, where a merchant says, you know, if you charge this, we're gonna, we're gonna hit you with 3%, 4% upcharge, or the charge on, on just the item you're pro. You're buying could be more expensive. So the merchant is absolutely loving this. What it also does for the merchant is in many cases, merchants literally have to have a team of people just to deal with processing these refunds and not, I'm not saying that this eliminates that team, but the data that, that the, the transaction can provide to the merchant in terms of time of day, what day of the week it is, what type of product it was, that type of data that the merchant can get instantaneously absolutely helps them make decisions as to, well, maybe we don't want to offer this product Here, maybe we have to change things around. So for the merchant side of things, they are seeing just incredible benefits. The bottom line is though, you know, their fee is, is cut by 60, 70%.

[A]

Thank you. Take a moment. You've been excelling. You've got a great leadership team, really brilliant leaders with you. You've grown in a competitive environment. What are some of the keys to growth in a challenging environment that help you stand out in what you're doing as well?

[B]

Absolutely. And it absolutely is a competitive environment. So I think that especially when we started this, everybody wants to just race to the finish line. And one of the things that we have learned, you know, in our successful businesses is it's that old adage of walk before you run. And sure, you want to grasp everything that is out in front of you and, and you know, more often than not when you bite off more than you can chew, it comes back to, to really haunt you. So we have been very deliberate in our process building up the business one product at a time. Even, even though, you know, this is such a competitive landscape and just really focusing on perfecting one product, making sure that all of the benefits out there, at least in this space for both the merchant and consumer, are 100% understood, 100% real, which they are, and then branching out. So our relationships with, with our clients, with, with both our merchants and then with other ISOs, ISOs being independent sales organizations, are really all built on that model. And sure, some people, you know, some, some of our, some of our ISO, some of our vendors want to just run with everything at first and that's just a recipe for disaster.

[A]

As a leader, you do an incredible job personally of staying centered, staying focused, keep yourself on top of things. You've led great teams, you've built businesses. You certainly, you talk about at the board, you talk about in life. You've navigated a lot of change and done it extraordinarily well. Are there daily habits or personal principles that you use to help keep you focused and learning and centered in such a fast moving world?

[B]

Yes, absolutely. And first off, and I think this goes really for any business, Scott, is you can't be afraid of making a mistake. And what I mean by that is if you don't investigate, if you don't continuously learn, if you don't try things, you're never really going to reach that next level. On top of that, you can't be afraid to admit a mistake, whether it's to your team, whether it's to a merchant, a client, that is the Biggest hurdle that I have seen in other leaders, other businesses is when a mistake is made. And we know regardless of the business out there, mistakes are made is owning up to it and taking care of it and making sure that, that your customer is righted. Right. And always has a good taste in their mouth, if you will. And so that's the way that we run our businesses. That's the way we run our staff, our team. Everybody is on the same level. Just because I'm CEO doesn't really mean that I, you know, am any different than, than anybody else in the business. And it's all a matter of transparency and just owning up and quite frankly, living up to expectations, never setting false expectations, never, you know, over promising and under delivery that that can derail a business immediately.

[A]

We love that take. It's always better to under promise and over deliver. It's exactly what you said. It's leaving that right taste in the customer's mouth is so important. Scott, we've got you hosted as our technology leader of the month today. It makes me so happy. I can't even tell you anything else you'd like to share with the audience today about Mosaic processing and what you're doing.

[B]

I think that the bottom line is our company is built on trust. The background that myself, my partner, Mike Frazen has. You know, people can find us out there, they can find us on the Internet, they can find reviews about us. And I think the one constant is trust and communication. Again, regardless of the business that we are in, that is, those are really the two biggest values. So a big part of our success over time in our many businesses is that and it's communication. So anybody that we will work with can feel confident from the first second that they will always get the utmost transparency, the utmost truth. And it's easy for me to say that, right? Most businesses want to hang their hats on that. But I think when people want to look up Scott Bauer, Mike Frazen, Mosaic Processing that's what's going to stand out in front of them.

[A]

And I'll just add to that very quickly. Mike. You could love Mike or hate Mike, but as good a person as they come, the highest integrity that there is out there, very clear thinking, very bright, very gifted, and quite frankly, I say you could love or hate Mike, but if you hate him, there's probably something wrong with you because he's a very gifted, very high integrity leader in person and, and thinker. The people that I know that have had long term business relations with Mike rave about what a person he is. So when you speak about integrity and taking care of customers, it's so true of the both of you and your team. Scott, I want to thank you for joining us today on the Becker Private Equity and Business Podcast. Always a great pleasure to visit with you. Thank you very, very much, Scott.

[B]

Really appreciate the opportunity. I really appreciate it. Thank you so much.