Mastercard is acquiring Ethoca, a Toronto-based fintech company that help merchants and card issuers collaborate in real-time to quickly identify and resolve fraud in digital commerce.
Today, the Ethoca network brings together more than 5,000 merchants and 4,000 financial institutions around the world.
When a fraudulent transaction is identified, near real-time information is sent to the merchant so they can confirm the transaction, stop delivery or reverse the transaction to avoid the chargeback process.
As a result, both merchants and card issuers benefit from lower operational costs by reducing fraud at the source.
Mastercard intends to further scale these capabilities and combine Ethoca with its current security activities, data insights and artificial intelligence solutions to help merchants and card issuers more easily identify and stop potentially fraudulent purchases and false declines.
Terms of the agreement were not disclosed and the transaction is anticipated to close in the second quarter of 2019.