Global card network giant Mastercard said today it plans to acquire identity verification company Ekata for $850 million in a bid to better secure transactions and prevent fraud in an increasingly digital payments world.
Mastercard said in a press release the acquisition builds on a digital interaction framework it began to lay out in 2019, with an eye to buttressing its digital interactions. The Purchase, New York-based Mastercard, with 21,000 employees worldwide, expects to close on the Ekata buyout within six months.
Mastercard spokesman Seth Eisen wasn't able to say how Ekata's Seattle operation and 200-employee workforce might be affected, or whether Ekata CEO Rob Eleveld would stay on in a leadership role. "We're only announcing the deal today and there are still a lot of details to be worked through," Eisen said. "But, no changes are currently planned."
Verification software has become an increasingly important tool for payments companies, with more transactions shifting to the digital sphere where it's sometimes more difficult to assess customers and spot bad actors. It became particularly critical during the pandemic when digital transactions picked up. Ekata is one in a pack of technology companies that have sprung up around the need to better secure digital transactions. For instance, Palo Alto, California-based Jumio is another such company, focused mainly on B2B transactions.
"The shift to a more digital world requires real solutions to secure every transaction and instill trust in every interaction," Ajay Bhalla, Mastercard's president of cyber and intelligence solutions, said in the release. "With the addition of Ekata, we will advance our identity capabilities and create a safer, seamless way for consumers to prove who they say they are in the new digital economy."
Ekata's technology, which incorporates artificial intelligence tools, and engineering teams will help Mastercard consumer, bank, merchant, fintech and government clients with data, payment and opening account needs, with potential to expand to real-time payments and cross-border activities, the companies said in the release.
"Becoming part of the Mastercard Identity family ensures a broader, collective approach to meeting the growing demands of the digital economy,” Eleveld said in today's statement.
Ekata added 300 new customers last year and increased revenue 33%, the company said in a February statement on its 2020 results. The company didn't disclose the annual revenue figure for that period.
“With the first 12 weeks of the pandemic creating more growth in online business than the previous five years combined, the global demand for enterprise grade digital identity verification solutions has never been higher, Eleveld said in the February statement.