Payment reference Checkout acquires identification specialist Ubble

British unicorn Checkout has announced that it has bought French identity verification startup Ubble. This move is further evidence that the most innovative players need to accelerate their efforts to comply with new regulations in order to sustain their business.

FACTS

• Ubble is the originator of a system capable of verifying identities based on the analysis, thanks to Artificial Intelligence and machine learning, of more than 2000 types of documents from 214 countries and territories. At the end of 2021, it had around fifty clients in France and Europe.

• It will now be owned by Checkout, a leading FinTech for payments in the e-commerce market. Thanks to Ubble's solution, Checkout intends to improve its own services in three major areas:

  • checking the compliance of sellers and fintechs with local regulations

  • verification of the identity of their end customers,

  • anticipating changes in the legal environment.

• The transaction is expected to close later this year subject to regulatory approvals. The amount of the buyout has not been specified.

CHALLENGES

• Staying ahead of legislation: The acquisition of Ubble will enable Checkout to secure its forthcoming certification by Anssi, allowing it to comply with regulatory developments, including in the fractional payment sector in which Checkout operates. Checkout also intends to develop its activities in the crypto-asset and decentralised finance markets in the medium term.

• Expanding its offering: In addition to regulation, Checkout plans to integrate Ubble's offering with its own services. The payment specialist thus plans to offer marketplaces an API-based offering integrating its payment service and Ubble's security solution.

MARKET PERSPECTIVE

• Following the example of Klarna and BNPL, there has been a trend for several years now towards innovation in the financial market, on the fringes of the legislation and regulations in force. But these alternative services are not without risk and are now being brought back into line with new specific standards.

• Other players, such as N26 for example, have been caught by the compliance bug for neglecting their regulatory obligations and are now suffering the consequences of their actions.

• However, Checkout is now demonstrating an intelligent preventive strategy by integrating the services of a player capable of providing the expertise it has lacked until now in terms of identification and therefore security.