Shortly before the Independence Day Weekend in the U.S., Visa signed a definitive agreement to acquire Verifi—the latest foray by card networks and processors trying to augment their fraud identification and prevention capabilities for e-commerce. The deal is expected to bolster Visa’s suite of risk and fraud management tools with the addition of Verifi’s network that connects issuers and merchants to head off disputes before they become chargebacks.
Verifi leverages that network to foster communication between credit-card issuing banks and the merchants that accept those card payments for online transactions. It automates a system alerting merchants to disputes that have not yet been elevated to chargebacks, enabling them to address the dispute before chargeback costs have been incurred.
“As the way people pay and get paid continues to evolve, the way buyers and sellers communicate to resolve transaction disputes must also keep up with this rapid pace of commerce. The addition of Verifi’s technology to Visa’s risk management solutions will introduce greater collaboration and insights to help resolve disputes quickly,” said Mary Kay Bowman, global head of seller solutions for Visa. “Facilitating trust and transparency across the buying experience is core to Visa’s brand promise and Verifi’s technology and expertise will extend these capabilities to more partners across the payments ecosystem.”
Visa’s acquisition of Verifi follows its previous purchase of authentication company CardinalCommerce in further consolidating the online fraud space. Similar cases of networks nabbing startups in the fraud prevention/authentication space include MasterCard and American Express acquiring NuData Security and InAuth respectively two years ago.
No further details about the deal are available at this time, and the transaction closing is subject to customary closing conditions and the required regulatory approvals.