🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Visa bolsters financial crime prevention portfolio with Featurespace deal

Published 09/26/2024, 09:10 AM
Updated 09/26/2024, 01:01 PM
© Reuters. FILE PHOTO: Visa credit and debit cards are seen in this picture illustration taken August 2, 2022. REUTERS/Benoit Tessier/File Photo
V
-

By Manya Saini

(Reuters) -Visa agreed to buy AI-driven payments protection firm Featurespace on Thursday, marking the payments giant's latest effort to strengthen its financial crime and fraud detection product portfolio.

Fintechs, particularly those in the payments sector, have been exploring AI-driven use-cases for fraud prevention tools amid rising cases of sophisticated financial crimes including hacks and ransomware, many of which are powered by generative AI.

While the world's largest payments processor did not reveal the value of the acquisition, a Sky News report last month, citing sources, had pegged it at £700 million ($935.06 million).

Britain's IP Group - Featurespace's largest shareholder and its first institutional investor - said it expects to receive £134 million in cash from the takeover. It has invested a total of £22.9 million in the company over seven financing rounds.

Cambridge, UK-based Featurespace was founded in 2008. It counts high-profile banking companies such as HSBC, NatWest and Worldpay among its clients.

Visa (NYSE:V) said Featurespace's AI-enabled solutions will help its clients manage fraud in real time. In July, Visa said it prevented 80 million fraudulent transactions worth $40 billion globally last year thanks to investments in AI.

Earlier in September, Mastercard (NYSE:MA) also struck a $2.65 billion deal for threat intelligence company Recorded Future.

"This (Featurespace) deal is a particularly good fit, in our opinion, as it broadens Visa's value added services offerings further beyond processing and merchant solutions," analysts at brokerage William Blair said.

"We believe the increasing mix of VAS and new flows revenue is an important piece of the Visa story, especially as transaction-based revenues face increased regulatory scrutiny."

Earlier this week, the U.S. Department of Justice filed a lawsuit alleging Visa violated anti-trust law by suppressing competition.

© Reuters. FILE PHOTO: Visa credit and debit cards are seen in this picture illustration taken August 2, 2022. REUTERS/Benoit Tessier/File Photo

Visa has been facing heightened scrutiny from regulators and lawmakers for years, battling allegations of a duopoly with Mastercard, which both companies have denied.

($1 = 0.7486 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.