Visa acquires fraud specialist Featurespace

According to Sky News reports, Visa has signed a deal to acquire software company Featurespace, with the financial payments giant negotiating a potential £700 million deal.

Cambridge-based Featurespace develops real-time payment protection technology powered by artificial intelligence (AI) that aims to prevent and reduce payment fraud and financial crime.

As part of the agreement, Visa intends to expand and strengthen its Fraud Detection and Risk Assessment Solutions business to provide better protection against fraud.

Visa said the acquisition will combine the expertise of both companies to enable companies to manage fraud in real-time and further protect the payments ecosystem by integrating artificial intelligence-based solutions.

Antony Cahill, global director of value-added services at Visa, emphasized the importance of providing Visa customers with solutions that can adapt to and anticipate the changing threat landscape.

“Featurespace’s strong AI foundation will strengthen our existing product portfolio and enable us to address our customers’ most complex and pressing challenges,” he said.

The technology company was founded at the University of Cambridge’s engineering faculty and since its inception in 2008 has focused on developing algorithm-based solutions for analyzing transaction data and detecting sophisticated fraud.

The software specialist has developed a number of platforms to help detect fraud, including Adaptive Behavioral Analytics, Automated Deep Behavioral Networks and ARIC Risk Hub, an open technology tool to combat fraud and financial crime.

HSBC, NatWest, TSYS, Worldpay, Danske Bank, Akbank, Edenred and Permanent TSB have used this provider’s technology.

Featurespace has been backed by a number of private investors including Chrysalis Investments, Highland Europe, IP Group plc, Insight Partners, MissionOG and TTV Capital.

UK-based IP Group, which has invested a total of £22.9m in seven rounds of financing since 2012, said it expects to receive £134m in cash from the deal.

Visa added that it is investing “billions of dollars in technology,” including to reduce fraud and enhance network security.

Dave Excell, founder of Featurespace, said: “We have served the financial services industry over the past 12 years, building a company that has gone from strength to strength, and we are thrilled to become a part of Visa. With Visa, we can bring the innovation, integrity and purpose of our platform and our team to more payment providers and ultimately stop more people from becoming victims of financial crime.”