Dive Brief:

• Visa said Thursday in a press release that it plans to acquire the British cybersecurity and analytics software firm Featurespace. While the card network didn’t provide a purchase price, a U.K. news organization reported a firm valuation at just under $1 billion.
• Cambridge-based Featurespace uses real-time artificial intelligence to aid financial institutions in sifting through payment transaction data to spot fraud patterns, increasing their ability to detect and thwart fraud.
• “The acquisition of Featurespace will complement and strengthen Visa’s portfolio of fraud detection and risk-scoring solutions used by clients around the world to grow and protect their businesses,” the card network’s press release said.

Dive Insight:

An increase in the incidence and sophistication of financial services and payments fraud is driving companies in the industry to find better software and other technology tools to combat the criminal activity.

As the biggest card network in the U.S. and a major financial services company worldwide, San Francisco-based Visa, like its peers, is under pressure to protect its own transactions and to protect its clients. Earlier this year, Visa’s CEO, Ryan McInerney explained how the company invests billions of dollars on such defenses.

“Cybersecurity is a huge topic for any company around the planet, especially for financial services firms, and especially for us as a platform for banks around the world, and as you might imagine, we’re a huge attack vector,” McInerney said in speaking at an RBC Capital Markets conference in March.  

In a significant attack this week, the money transfer company Moneygram said it took its systems offline after a cyber incursion. That outage lasted for days, according to news reports.

McInerney said about 1,000 of the company’s 30,000 worldwide workers are “only working on cyber.” “We are all in an arms race to protect this ecosystem, to protect the network,” he explained.

The acquisition of Featurespace is aimed at helping Visa enable its clients to keep pace with the evolving strategies of fraudsters. “Providing our clients with solutions that can adapt to and anticipate the changing threat landscape is of the utmost importance,” Antony Cahill, Visa’s global head of value-added services, said in the release. 

Among Featurespace’s existing clients are a number of U.S. payments companies. Its clients include Worldpay, Global Payments’ TSYS and U.S. Bank’s Elavon, among others, according to an RBC analyst’s note to clients earlier this month. 

Visa isn’t the only card network seeking to advance its tools in the cybersecurity area. Its top U.S. competitor, Mastercard, has been on an acquisition spree in the area too. Mastercard earlier this month announced its latest in a series of cybersecurity purchases, paying $2.65 billion to buy Boston-based Recorded Future from the venture capital firm Insight Partner.

Visa said it expects the transaction to close by next September, pending regulatory approvals.