Mastercard to Acquire Ekata for $850 Million

Mastercard Acquires Ekata for $850 Million

The importance of robust online identity management is rapidly increasing. In response, Mastercard has completed the acquisition of Ekata, a company specializing in identity verification, for a sum of $850 million.

Digital Transformation and the Need for Verification

Mastercard recognizes the swift digital shift occurring within the realm of online commerce. This transformation was notably accelerated by the COVID-19 pandemic. It’s a change that is unlikely to revert to previous business practices, even after the pandemic subsides.

Ekata provides a real-time solution for verifying the online identities of individuals during transactions. This is achieved through the analysis of various signals that help determine the legitimacy of account openings and business dealings.

How Ekata's Technology Works

The company delivers a score and associated data that predicts the probability of an individual being who they claim to be. This functions similarly to a credit risk score, but specifically focuses on identity assurance.

Mastercard's Rationale for the Acquisition

According to Ajay Bhalla, president of cyber and intelligence solutions at Mastercard, the acquisition of Ekata was driven by the need to enhance identity capabilities. “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 stated.

Synergies and Fraud Prevention

Both companies anticipate that integrating Mastercard’s existing fraud detection solutions with Ekata’s scoring methodology will effectively deter malicious actors from exploiting online platforms for illicit activities.

Rob Eleveld, CEO at Ekata, emphasized the growing significance of digital identity verification. “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,” he explained.

Ekata's History and Customer Base

Formerly known as Whitepages Pro, the company rebranded as Ekata in June 2019. Notably, Ekata had not sought additional funding prior to the acquisition, as indicated by data from PitchBook and Crunchbase.

The $850 million acquisition price represents a substantial return for a company that operated without external investment. Ekata serves a diverse clientele of over 2,000 customers, including prominent names like Lyft, Stripe, Equifax, Checkout.com, and Intuit.

Looking Ahead: Regulatory Approval and Closing

Mastercard’s willingness to invest in this solution underscores its increasing importance. The acquisition is contingent upon standard regulatory approvals. It’s important to remember the previous blockage of the Visa-Plaid deal by regulators.

Assuming regulatory clearance, the acquisition is expected to be finalized within the next six months, according to company announcements.