Diving overview:
Visa announced in a press release Thursday that it plans to acquire British cybersecurity and analytics software company Featurespace. The card network did not disclose the purchase price, but British news outlets reported a firm valuation of just under $1 billion. Cambridge-based Featurespace uses real-time artificial intelligence to help financial institutions sift through payment transaction data to identify fraud patterns, increasing their ability to detect and stop fraud. “The acquisition of Featurespace will complement and strengthen Visa’s portfolio of fraud detection and risk scoring solutions used by customers around the world to grow and protect their businesses,” the card network said in a press release. the release states.
Dive Insight:
The incidence and sophistication of financial services and payment fraud is leading companies in the industry to look for better software and other technology tools to combat criminal activity.
Visa, the largest card network in the United States and a major financial services company around the world, is under pressure, like its peers, to protect its transactions and customers. Earlier this year, Visa CEO Ryan McInerney explained how the company is investing billions of dollars in these defenses.
“Cybersecurity is a big topic for any company in the world, especially a financial services company, especially for us as we are a platform for banks around the world, and as you can imagine, we are a huge attack vector.” said McInerney. He spoke at the RBC Capital Markets Conference in March.
In a major attack this week, money transfer company MoneyGram announced that its systems were taken offline following a cyber intrusion. The outage lasted several days, according to news reports.
McInerney said about 1,000 of the company’s 30,000 employees worldwide “work exclusively in cyber.” “We’re all in an arms race to protect this ecosystem and protect our networks,” he explained.
The acquisition of Featurespace is intended to help Visa keep its customers abreast of fraudsters’ evolving strategies. “Providing our customers with solutions that can adapt and anticipate the changing threat landscape is paramount,” Antony Cahill, Visa’s global head of value-added services, said in a release.
Among Featurespace’s existing customers are a number of US payment companies. The company’s clients include Worldpay, Global Payments’ TSYS and US Bank’s Elavon, according to a note from RBC analysts to clients earlier this month.
Visa isn’t the only card network looking to advance its tools in the cybersecurity space. Mastercard, its biggest U.S. competitor, is also making acquisitions in this space. Mastercard announced the latest in a series of cybersecurity acquisitions earlier this month, paying $2.65 billion to acquire Record Future from Boston-based venture capital firm Insight Partners.
Visa said it expects the transaction to be completed by September next year, pending regulatory approval.
