Mastercard has agreed to acquire NuData Security, a company that leverages session and biometric indicators to help fight mobile and online fraud as payment capabilities rapidly expand to Internet of Things devices.
NuData’s NuDetect product identifies authentic users from potential fraudsters based on behavioral biometric indicators displayed during their online, mobile app and smartphone interactions, flagging those that represent the highest risk. The technology assesses, scores and learns from each online or mobile transaction to enable merchants and issuers to make near real-time authorization decisions.
The acquisition will strengthen Mastercard’s efforts around device-level security and authentication, enabling near real-time collaboration between issuers, merchants and processors, Mastercard said. "The addition of NuData will build on our layered security strategy to safeguard each and every transaction across the globe," said Ajay Bhalla, president of enterprise risk and security for Mastercard. “The combination of session and biometric information will provide even richer context around potential cyber and device-specific threats, enabling us to deliver even greater trust and peace of mind.”
This acquisition follow Mastercard’s launch last fall of its Identity Check biometric security offering built around fingerprint and facial recognition technology, and NuDetect seems like a natural fit to greatly expand the capabilities housed under Identity Check.
However, the best security strategy is a multi-layered one, and Mastercard has been busy building its own multi-layered, multi-product approach to payment security. Before this acquisition, the payment network also rolled out a fraud detection and mitigation service built on artificial intelligence technology, and has been aggressive in enabling tokenization for secure transactions, and both those efforts were in addition to Mastercard’s ongoing campaign to expand support for EMV-based transactions.
Biometrics is not a new arena in security technology, as Apple Pay and other already use some form of biometric security with their fingerprint authentication capabilities. However, the whole discipline of biometrics security is evolving quickly, and companies developing new schemes are quickly moving front and center in the payments space. For example, Alibaba last year acquired a company with eye-scanning technology for authentication.
Behavioral biometrics presents a fairly new approach to monitoring and scoring customer and device interactions during transactions. NuDetect can measure and identify the typing patterns of individual devices users and even the distinct ways in which their hands might hold a given device, as well as hundreds of other signals occurring within the context of a single interaction or transaction.
NuData is not new (or nu?) to this sector, either. The company claims to already monitor about 80 billion online interactions annually on behalf of several global brands. Fraud continues to be a problem, perhaps a bigger problem than ever, and Mastercard has decided to add a new weapon to its arsenal as it continues the fraud fight.