Mastercard bolsters digital security with Ekata acquisition

Mastercard has acquired the digital identity management firm Ekata for $850 million to incorporate the firm’s technology into its own digital commerce capabilities.

The financial services firm will feed this acquisition into its framework for digital payments, devised in 2019, as it seeks to expand its digital operations. Ekata’s technology, specifically, will enhance the firm’s identity verification systems and bolster Mastercard’s security.

Ekata’s application programming interfaces (APIs) are often used by companies engaged at all levels of digital commerce, including financial services firms as well as merchants and vendors. The firm’s core platform, Pro Insight, offers customers risk scoring based on artificial intelligence (AI), as well as key data points and indicators that can be feed into decision-making.

"The shift to a more digital world requires real solutions to secure every transaction and instil trust in every interaction," said the president of cyber and intelligence solutions at Mastercard, Ajay Bhalla.

"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."

Mastercard is hoping to combine the verification data captured by Ekata, alongside its machine learning technology and expertise with its own fraud prevention and digital identity programmes. By doing so, the firm aims to provide businesses with the capability of knowing who their customers are and, in turn, allowing their customers to safely engage in purchases and transactions online.

Ekata’s technology and engineering teams will undergo an integration process with Mastercard in the near future. The financial services giant hopes to establish itself as a one-stop partner for consumers, banks, merchants, fintech or government data, general payments as well as open banking needs.

The combined technology will deliver a more comprehensive identity service to power real-time decision making, from account opening to helping merchants assess fraud before authorising a transaction.

The deal follows Mastercard’s acquisition of Finicity in June 2020 for a similar sum of $825 million. This previous acquisition saw the company strengthen its open banking services by letting customers determine how and where fintech firms or banks can access information to provide money management services or initiate payments.

The company has been accelerating its digital expansion of late, having also announced a scheme that will see it support digital currencies in the near future. In 2021, Mastercard will begin to support select cryptocurrencies if they prove to be secure, compliant with industry standards and regulations, as well as proving stable enough to be used as a “vehicle for spending”.