Mastercard Incorporated ( MA Quick Quote MA - Free Report) has acquired Ekata, a digital identity verifier, for $850 million. The acquisition will bolster the company’s identity verification capabilities to protect merchants and consumers from possible frauds.
Ekata will help verifying customer details and credentials remotely. These checks are required at the time of online account opening, making payments and other digital transactions. Verified data also aids in greater financial inclusion and development of economy.
The solution seems to be a perfect fit for Mastercard, given its global expertise, an array of identity verification services and machine learning technology. This when integrated with the fraud prevention and digital identity programs of Mastercard will provide full security to digital payments at a time when cybercrime is on the rise.
Global Identity Verification Market Set to Grow
According to ResearchAndMarkets.com, the global identity verification market is expected to expand from $ 7.6 billion in 2020 to $15.8 billion by 2025, seeing a CAGR of 15.6% during the forecast period. The major growth drivers for the market include increasing digitization initiatives, rising fraudulent activities and identity theft during the last decade, and higher use cases of digital identities among verticals. However, price disparity in identity verification solutions and services may restrain market growth.
Tech-Driven World Reinforces the Need for Digital Identification
Digital payment was frequent even before the pandemic had struck but the current situation definitely accelerated the trend, leading to a rapid boom in ecommerce as people took to remote shopping to stay away from the infectious COVID-19.
The momentum is likely to continue ramping up digital payments.
Digital payments comprise payment transactions carried out using a variety of electronic modes, such as cards, mobile or internet-based set ups to send and receive money. With the rollout of 5G technology, more devices will be enabled with payment capabilities. Machines, devices and even objects will actively participate in transactions
Though digital payments make transaction easier for all the parties in the whole ecosystem, it exposes them to greater risks involving identity theft, money laundering and other fraudulent activities. Thus, transactions move to an increasingly automated experience while the user trust is necessary for the ecosystem to flourish.
Last few years saw a spike in online fraud, theft and hacking, thus making the payments industry most vulnerable. A large chunk of customers’ sensitive data is always at risk, making their finances highly susceptible to attacks.
For customers, security of their transaction is paramount and the companies giving full assurance of the same will be most reliable. A payment network providing multiple layers of safety is considered the ideal facilitator.
Therefore, management of leading companies is always on toes to keep enhancing security with updated features and solutions.
Other Players Gearing Up
Another payment processor, namely
Visa Inc. ( V Quick Quote V - Free Report) launched the Advanced Identity Score last year to minimize digital identity frauds.
Also, payment service providers like
American Express Company ( AXP Quick Quote AXP - Free Report) and PayPal Holdings, Inc. ( PYPL Quick Quote PYPL - Free Report) came up with digital tools or made investments to upgrade their digital identity capabilities. While the American Express unit Accertify launched an API-based solution for controlling fake online account openings and account takeovers, PayPal made substantial investments to use blockchain technology for boosting its digital identity suite. Zacks Rank and Price Performance
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