Cardinal’s payments platform analyzes 400 points of data in each online transaction to reduce fraud.

Payment card company Visa Inc. said today it will buy payment services provider CardinalCommerce for its services that help thwart fraudulent online transactions. Financial terms were not disclosed.

“The acquisition will enable more secure, seamless payments, whether made through a browser, mobile app or connected device, and will help Visa’s clients and merchant partners accelerate digital commerce,” Visa said in a statement.

Visa already provides Cardinal’s services to merchants and acquirers through its CyberSource merchant and acquirer unit. Visa says its global business will help Cardinal expand its international client roster.

“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,” says Mark Nelsen, senior vice president of risk and authentication products at Visa.

CardinalCommerce aims to improve communication about consumers between online retailers and banks, thus making it easier to authorize online purchases.

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CEO Mike Keresman said in July that Cardinal holds 63 patents, all proprietary inventions that the company developed. Among retailer clients, he says, there often is a divide between what they know about a consumer and what a financial institution knows. Retailers typically have one set of data about a customer, while banks have their own data. Cardinal’s payments services marry those data sets so that online retailers and banks can have more confidence that online transactions are legitimate.

Cardinal’s payments platform analyzes 400 points of data at each transaction to reduce fraud. Keresman says the company monitors 750,000 merchant identification numbers, which are what banks and other financial institutions use to identify businesses; plus bank identification numbers, which are the first six numbers of a credit card used to identify the issuing financial institution. Together these ID numbers help to verify a customer’s identity when they make an online purchase.

“By combining our authentication expertise and role in supporting both merchants and issuers, and Visa’s payments expertise and global reach, our two companies will be able to fast track the next-generation of digital authentication,” Keresman says.

CardinalCommerce provides mobile commerce services to five Top 1000 retailers, according to the 2017 Leading Vendors to the Top 1000. It provides payment security services to three and payment systems services to 13. Its e-commerce clients include American Eagle, No. 63 in the Internet Retailer 2016 Top 500, and Urban Outfitters Inc. (No. 39). Cardinal will continue to operate and serve its clients as a subsidiary of Visa, and will continue to support a broad range of payment brands. Co-founders Tim Sherwin and Chandra Balasubramanian will remain as leaders of the Cardinal team, based in Mentor, Ohio.

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The transaction is expected to close in Visa’s fiscal second quarter of 2017.

 

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