Mastercard To Buy Identity Verification Firm Ekata For $850 Million
Proving that customers are who they claim to be is one of the big challenges for payments providers as eCommerce sales surge. To “advance its identity verification efforts,” Mastercard will acquire identity verification firm Ekata for $850 million, the company announced in a Monday (April 19) press release.
Purchase, N.Y.-based Mastercard said that “together, Mastercard and Ekata will deliver a more comprehensive identity service that can power real-time decision-making needs, from new account openings to helping merchants assess potential fraud before a payment transaction is authorized.”
“The acceleration of online transactions has thrust global digital identity verification to the forefront as one of the biggest opportunities to build digital trust and combat global fraud,” said Ekata CEO Rob Eleveld. He added that identity verification products should also ensure “customer privacy, control and security.”
Mastercard’s goal is “to secure every transaction and instill trust in every interaction,” said Ajay Bhalla, president of cyber and intelligence solutions at Mastercard.
The release said that the combined company has the potential “to expand further to real-time payments and cross-border activities. … The addition of Ekata’s technology and engineering teams will help bolster the support Mastercard can provide as a one-stop partner for any consumer, bank, merchant, FinTech (financial technology company) or government’s data, payment and open banking needs.”
Mastercard, in 2019, introduced a new framework for dealing with the challenges of security and fraud, the release noted. “That framework is now in use across a number of sectors, from education to travel to healthcare.”
Ekata, based in Seattle, said it works with a wide range of global merchants, financial institutions, travel companies, marketplaces and digital currency platforms. The company helps “their customers identify good consumers and businesses and bad actors in real-time.”
The Ekata deal is subject to regulatory review and customary closing conditions. It is anticipated to close within the next six months.
Open banking poses new challenges for the payments industry. PYMNTS’ November 2020 Merchants Guide To Navigating Global Payments Regulations noted, “Many regulators are still determining what open banking looks like in their markets, debating data privacy and security standards and determining what entities have access to this information.”