FinTech News
Mastercard to Acquire Ekata for $850 Million
Just a few months after Mastercard completed its purchase of the FinTech firm Finicity, the company is looking to make another buy. This morning, Mastercard announced plans to acquire the identity verification platform Ekata for $850 million. The transaction is subject to regulatory review but is expected to close within the next six months. Additionally, despite the hefty price tag, Mastercard says it does not anticipate the purchase to be dilutive to its business for a period longer than two years.
With an aim of reducing fraud while increasing conversion, Ekata offers a number of services meant to identify bad actors from good potential customers in real time. This, in turn, leads to fewer chargebacks and lost revenues. According to its site, the company’s tools are already used by a number of top companies, including Lyft, Postmates, American Airlines, Equifax, and many others.
Commenting on the purchase, Mastercard’s president of cyber and intelligence solutions Ajay Bhalla said in a statement, “The shift to a more digital world requires real solutions to secure every transaction and instill trust in every interaction. 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.”
Meanwhile, Ekata CEO Rob Eleveld stated, “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. The right identity verification solutions enable inclusive and frictionless experiences while, at the same time, ensuring customer privacy, control and security.” Eleveld closed by saying, “Becoming part of the Mastercard Identity family ensures a broader, collective approach to meeting the growing demands of the digital economy.”
News of Mastercard’s impending Ekata acquisition comes just a week after another (albeit quite different) identity verification company Veriff revealed a new round of investment. That firm’s $69 million Series B round included participation from IVP and Accel. In a statement regarding the funding, Veriff’s founder and CEO Kaarel Kotkas said, “At Veriff, we are building trust and transparency in the online world, and our round marks the highest Series B amount raised to date in the IDV market, putting us one step closer to eliminating widespread identity fraud while helping businesses grow and go digital.”
After taking a look at Ekata, it’s easy to see why a company such as Mastercard would be interested in the firm. For their part, Mastercard even talks up the “complementary expertise” that comes with the deal, saying that the combined companies will be a “one-stop partner for any consumer, bank, merchant, FinTech or government’s data, payment, and open banking needs.” Considering that several FinTech companies already have ties and partnerships with Mastercard, this acquisition could benefit them as well. With that, we’ll need to check in on this proposed purchase in the coming months once closing has completed.
