In a bid to reduce e-commerce fraud and more broadly market antifraud technology, Visa Inc. has agreed to acquire CardinalCommerce, a provider of technology designed to authenticate the identities of online buyers. Visa did not say what it would pay for CardinalCommerce.

“We are excited to embark on this next chapter of Cardinal’s growth with Visa,” says Mike Keresman, founder and CEO, CardinalCommerce. “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 said in July that Cardinal holds 63 patents, all proprietary inventions that the company developed. He said that an online seller often has certain information about a customer, while financial institutions have other information. Cardinal’s payments services marry those data sets so that online retailers and other businesses and banks can have more confidence that online transactions are legitimate.

The acquisition will build on an arrangement under which Visa already provides online sellers with CardinalCommerce’s technology through Visa’s CyberSource payment-processing services. CyberSource is listed by 15 companies as a provider of online payment security in the B2B E-Commerce 300, including The Home Depot, No. 87; Lakeshore Learning Materials (143), Ingram Micro Mobility (163) and Tacoma Screw Products (209).

Visa says CardinalCommerce will play a bigger role in helping Visa integrate tokenization technology into its Visa Checkout application, and that Visa will uses its own broad international payment card market presence to expand the use of Cardinal’s technology. Tokenization uses encrypted codes, or tokens, to represent an online buyer’s credit card account number in payment processing. It’s designed to protect the buyer’s account data by preventing cyber criminals from converting the token back to the account number after hacking a merchant e-commerce site.

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For more about the planned acquisition, click here.

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