Visa Buys World’s Largest Authentication Network
Visa Inc. has acquired e-commerce authentication specialist CardinalCommerce in a move the payment network called a bid to amp up security for online and mobile transactions and reduce fraud. Visa already provides Cardinal’s services to merchants and acquirers through its CyberSource enablement platform. Under terms of the acquisition, Cardinal will operate as a wholly owned subsidiary of Visa, which will use its existing global presence and relationships to drive international expansion of Cardinal’s services, according to the network.
The transaction is expected to close in Visa’s second fiscal quarter 2017, subject to the customary closing conditions. Financial terms were not disclosed. Cardinal will continue to operate and serve all of its existing clients as a subsidiary Visa, and co-founders Tim Sherwin and Chandra Balasubramanian will continue to lead the Cardinal team, based in Mentor, Ohio.
“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,” said Mark Nelsen, senior vice president of risk and authentication products, Visa.
A pioneer in card-not-present transactions, Cardinal operates the largest authentication network in the world, according to the company. Bringing Cardinal under the Visa umbrella also will assist its plans to integrate tokenization into the Visa Checkout e-commerce service over the next 18 months, the network noted. The acquisition highlights the growing importance of offering seamless security for online purchases—an increasing percentage of which are taking place on smart devices—to reduce shopping cart abandonment, which costs m-commerce providers tens of billions in lost revenue each year, research has found.