As online identity management grows in importance, Mastercard swooped in this morning and bought identity verification company Ekata for $850 million.
Mastercard certainly sees the rapid digital transformation that is happening in online commerce, a move that was accelerated by COVID. It’s a transformation that once started isn’t likely to change back to the old ways of doing business, even when we get past the pandemic.
With Ekata, the company gets a solution that can verify the online identity of a person making the transaction in real time using various signals that can indicate if this is fraudulent or true as they open an account or transact business. The company provides a score and other data that predicts the likelihood this person is who they say they are. It’s not unlike a credit risk score, except for identity.
That was one of the primary reasons Mastercard decided to acquire Ekata, according to Ajay Bhalla, president of cyber and intelligence solutions at the company. “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,” Bhalla said in a statement.
The two companies believe that by combining Mastercard’s fraud detection solutions with Ekata’s scoring approach, they will help prevent bad actors from using online platforms to conduct business. “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,” Rob Eleveld, CEO at Ekata said in a statement.
The company, which was previously known as White Page Pro, was spun out as Ekata in June 2019. It has not raised any additional money, according to both Pitchbook and Crunchbase data. It would seem that $850 million represents a nice exit for a company that hasn’t raised a dollar, but it’s clearly more mature than your average startup with 2000 customers including Lyft, Stripe, Equifax, Checkout.com and Intuit.
It appears that Mastercard was willing to pay to get the company it wanted at a time when a solution like this is becoming more essential than ever. The acquisition is subject to standard regulatory approval, but remember regulators quashed the Visa-Plaid deal last year. If it passes muster, it should close some time in the next six months, according to the company.
