Visa announced Thursday it will acquire e-commerce payment authentication player CardinalCommerce.
Visa already provides Cardinal’s One Connection authentication solutions to merchants and acquirers through its CyberSource merchant and acquirer enablement platform; this move will enable Visa to expand Cardinal’s products and services globally and to boost fraud protection as digital payments expand to additional channels, according to a press release.
Terms of the deal weren't disclosed. Cardinal will continue to operate and serve its clients as a wholly-owned subsidiary.
The increasing prevalence of smartphones and mobile payments worldwide, as well as the shift in the U.S. to chip-enabled credit cards, are helping put card-not-present fraud in the spotlight. Over the 2016 peak holiday period (the same time of year when Target experienced its debilitating 2013 point-of-sale breach), for example, U.S. online fraud attempt rates are expected to increase 43% from the year-ago period, according to research from global payments company ACI Worldwide emailed to Retail Dive. Even declines in the average ticket value of fraud attempts are an indication of the scope of the problem, as fraudsters have moved to include smaller purchases in the mix, according to the study.
As the payments industry has moved forward with new technologies like the 3-D Secure 2.0 standard, players like Visa must find ways to accommodate new devices and payment methods while also maintaining speed and security.
“This strategic acquisition combines Visa’s industry expertise and Cardinal’s critical role in payment authentication to bring added security to online transactions, reduce fraud, and support digital commerce which is the fastest growing commerce segment today,” Mark Nelsen, Visa senior vice president of risk and authentication products, said in a statement. “By helping merchants, acquirers, and issuers better distinguish between good and bad transactions, Visa is in an even better position to strengthen consumer trust in digital payments, help merchants grow their businesses, and accelerate innovation in commerce.”
For Cardinal, the move signals an opportunity to quickly expand.
“We are excited to embark on this next chapter of Cardinal’s growth with Visa,” Cardinal founder and CEO Mike Keresman said in a statement. “By combining our authentication expertise and role in supporting both merchants and issuers, and Visa’s payments expertise and global reach, our two companies will be able to fast track the next-generation of digital authentication.”