Mastercard Acquires Ethoca to Bolster Online Fraud Detection
Mastercard has agreed to acquire Ethoca, a leading fintech company specialising in online fraud detection, for an undisclosed sum. The deal is expected to close in the second quarter of 2023. This acquisition comes amidst rising concerns about online fraud, with retailers projected to lose $130 billion by 2023 due to card-not-present fraud incidents, according to Juniper Research.
Ethoca's real-time ai detector free network, which connects over 5,000 merchants and 4,000 financial institutions, will bolster Mastercard's existing security portfolio. The company's founder and CEO, Ezz Al Zubeidi, will continue to lead Ethoca post-acquisition. Mastercard plans to integrate Ethoca's products with its current offerings, including Decision Intelligence and NuData, further enhancing its anti-fraud capabilities.
Stopping fraud at the transaction source benefits both merchants and card issuers. It reduces operational costs, investigation time, and customer boycotts. False declines, where legitimate transactions are rejected due to perceived fraud risk, also pose a significant challenge. In the U.S. alone, false declines led to losses of $331 billion in 2018, according to Aite Group. Mastercard's recent acquisition of Transfast, a cross-border payment network operator, also demonstrates its commitment to expanding its payment capabilities.
Mastercard's acquisition of Ethoca strengthens its position in the fight against online fraud. By integrating Ethoca's real-time ai detector network, Mastercard aims to reduce fraud-related losses and improve the overall customer experience. As online transactions continue to grow, so does the need for robust security measures to protect both merchants and consumers.
