Visa acquires Featurespace to fight fraud more effectively

American payment giant Visa recently announced its strategic decision to acquire British transactional fraud prevention and detection specialist Featurespace. Featurespace relies in particular on the latest AI technologies to justify the quality of its approach. This is all the more important for Visa, which is constantly striving to optimize its payment processes.

FACTS

• Visa has just completed another acquisition, this time of a specialist in the fight against fraud in the payments market. Featurespace was founded in 2008 by engineers from Cambridge University.

• Featurespace will join the Visa group, bringing its in-house anti-fraud solution based on the latest Artificial Intelligence technologies. Featurespace has developed innovative algorithmic solutions for analyzing payment transaction data and detecting fraud.

• Featurespace boasts 80 customers and some 100,000 corporate users of its software. Until now, Featurespace has provided its services to major groups such as HSBC, NatWest, Worldpay, Danske Bank and Edenred.
  The financial terms of this takeover, which should be finalized by 2025 subject to the approval of the relevant authorities, have not been revealed. Some sources put the figure at $925 million (€830 million).

CHALLENGES

• Complementing its offering: The acquisition of Featurespace is presented by Visa as a means of complementing and strengthening its portfolio of payment fraud detection and risk assessment solutions. These solutions are used by Visa customers worldwide to develop and protect their businesses.

• Responding to competition: Maintaining its status as a global payment market leader requires Visa to position itself ahead of trends and respond to competition. In addition to integrating Featurespace's AI technologies, this acquisition represents a way for Visa to catch up with MasterCard in the fight against fraud. MasterCard has just announced an extension to its own solution.

MARKET PERSPECTIVE

• Last July, the SSMSI, the statistical service in charge of internal security operating on behalf of the French Ministry of the Interior, published a study on the evolution of frauds and means of payment recorded by security services between 2016 and 2023. The figures are particularly worrying, revealing an average annual increase of 7.3% in France.

• On a global scale, a study on payment fraud, conducted jointly by Javelin and leading analytics company SAS, looked at fraud trends across 12 countries. Published in July 2023, it revealed a 30% growth in fraud-related losses for US users alone between 2021 and 2022. American users lost $8.8 billion to fraud in 2022.