A solid identity verification regime is crucial to nearly any activity connected to eCommerce. In that spirit, Mastercard (NYSE:MA) has acquired a company that specializes in digital identity, Ekata. The card giant paid $850 million for its new asset.
Ekata has developed a suite of software tools that guard against identity theft in a range of financial services interactions such as online bank account opening and online shopping. It says that it has a partnership network of over 2,000 entities, which includes a wide variety of well-known businesses, including rideshare giant Lyft, its rival Uber's Postmates delivery service, and Alaska Airlines.
Of that, Ekata added 300 new customers in 2020; according to Reuters the company claimed that its revenue consequently "surged," although no details were provided.
"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 quoted its CEO Ajay Bhalla as saying.
Mastercard did not provide any detailed estimates as to how owning Ekata might affect its fundamentals. It did say that Ekata should not "be dilutive to its business for greater than 24 months."
According to a 2020 report from online security company Signal Sciences cited by pymnts.com, online merchants have to defend against an average of around 206,000 cyber-attacks every month.
The Ekata deal is subject to review by the relevant regulators. Mastercard expects it to close within the coming six months.
On Monday, Mastercard's stock price slumped by slightly more than 1%. That exceeded the 0.5% drop of the S&P 500 index.