Visa Acquires Featurespace to Enhance AI-Driven Fraud Prevention

Visa to acquire Featurespace in AI-driven push against financial crime | bobsguide

Visa has announced its acquisition of Cambridge-based firm Featurespace, a leading developer of artificial intelligence (AI) technology focused on payments protection and fraud mitigation. This move underscores Visa's strategy to bolster its financial crime prevention capabilities, as the global payments landscape faces heightened threats from increasingly sophisticated fraud. Although the terms of the deal remain undisclosed, industry sources had previously valued the acquisition at approximately £700 million. This investment aligns with Visa's broader efforts to enhance its portfolio of AI-driven fraud detection and risk-scoring solutions, reinforcing its role as a trusted partner in the financial services ecosystem. Antony Cahill, Global Head of Value-Added Services at Visa, said, "Providing our clients with solutions that can adapt to and anticipate the changing threat landscape is of the utmost importance. Featurespace's strong foundation in AI will enhance our existing product portfolio and enable us to address our clients' most complex and pressing challenges. We look forward to welcoming the Featurespace team to Visa." The payments industry, particularly the fintech sector, has seen a surge in demand for AI tools capable of mitigating financial crime. As digital transactions proliferate, so too do the threats posed by cybercriminals employing generative AI and other sophisticated technologies. Featurespace's cutting-edge solutions are designed to detect fraud in real time, offering a crucial layer of protection to financial institutions and their customers. Founded in 2008 as a spin-off from Cambridge University's engineering department, Featurespace has grown to serve major financial clients, including HSBC, NatWest, and Worldpay. Dave Excell, Founder of Featurespace, expressed enthusiasm about the acquisition: "Over the past 12 years, we have served the financial services industry, 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 to more payment service providers and ultimately, stop more people from becoming victims of financial crime." This acquisition comes amid increased regulatory scrutiny of Visa's business practices. With regulatory bodies raising concerns about competition in the payments market, Visa continues to invest heavily in AI and cybersecurity. In 2023 alone, Visa prevented 80 million fraudulent transactions, protecting $40 billion worth of payments worldwide. The transaction is expected to close in fiscal year 2025, subject to customary regulatory approvals.

Visa Increases AI Fight Against Fraud With Featurespace Purchase

(Bloomberg) -- Visa Inc. will acquire real-time artificial intelligence payments protection firm Featurespace Ltd. -- marking the credit-card giant's latest move in bolstering its fraud and financial crime risk detection portfolio. Terms weren't disclosed. Founded in 2008, and headquartered in Cambridge, UK, the private company develops algorithmic-based software to analyze transaction data and detect fraud. In addition to Visa, Featurespaces' clients include HSBC, TSYS and NatWest Group. The demand for companies like Featurespace has surged due to the rise in more sophisticated financial scams, many of which are powered by generative-AI. In the second quarter of 2024, there were 284,000 reported cases of identity theft and nearly 111,000 cases of credit card fraud, according to a recent report by the FTC. Payments companies are catching on. In March, Visa added three new AI-powered fraud-prevention tools to its suite of products for business clients and said the company helped block 80 million fraudulent transactions worth $40 billion in 2023, nearly double the total in the previous 12 months. Earlier this month, Mastercard also announced the acquisition of global threat intelligence company Recorded Future for $2.6 billion. The demand for fighting fraud through AI is on the consumer side as well. 77% of customers expect financial institutions to use AI for better fraud prevention, showing the increasing demand for more advanced security measures, according to a 2023 FICO survey. "With Visa, we can bring the innovation, integrity and purpose of our platform and our team to more payment service providers and ultimately, stop more people from becoming victims of financial crime," Dave Excell, founder of Featurespace, said in a statement.

Visa Increases AI Fight Against Fraud With Featurespace Purchase

Visa Inc. will acquire real-time artificial intelligence payments protection firm Featurespace Ltd. -- marking the credit-card giant's latest move in bolstering its fraud and financial crime risk detection portfolio. Terms weren't disclosed. Founded in 2008, and headquartered in Cambridge, UK, the private company develops algorithmic-based software to analyze transaction data and detect fraud. In addition to Visa, Featurespaces' clients include HSBC, TSYS and NatWest Group.

Visa Buys Featurespace to Bolster Fraud Prevention Efforts | PYMNTS.com

Visa says it is acquiring payments protection technology firm Featurespace to boost its anti-fraud capabilities. "Since its inception out of Cambridge University's engineering department, Featurespace has developed innovative algorithmic-based solutions to analyze transaction data and detect even the most elusive fraud cases," the payments giant said in a news release Thursday (Sept. 26). The company did not provide a cost for the acquisition, though a report last month suggested a price tag of $925 million. The transaction is expected to close during fiscal year 2025. According to Visa, the two firms' combined expertise will allow clients to manage fraud in real-time and protect payments with artificial intelligence (AI)-powered solutions. "Providing our clients with solutions that can adapt to and anticipate the changing threat landscape is of the utmost importance," said Antony Cahill, Visa's head of value-added services. "Featurespace's strong foundation in AI will enhance our existing product portfolio and enable us to address our clients' most complex and pressing challenges." Featurespace Chief Operating Officer Tim Vanderham spoke with PYMNTS' Karen Webster last month, noting that "when you think about the billions and billions of dollars that come from scams globally," the money made from illicit gains dwarfs the revenues of some of the biggest businesses on the planet. That interview came in the wake of a Wall Street Journal article on the rise of "scam dens," which function essentially as business centers with sophisticated setups, complete with separate departments for training fraudsters, "onboarding" unwitting victims and KPIs used to conclude whether or not certain scams are working. "Along the way, fraudsters are proving adept at using artificial intelligence to develop relationships and trust on the part of their victims, preying on human emotions and making off with individuals' life savings and retirement holdings, draining their bank accounts with brazen speed, notably through authorized push payments," PYMNTS wrote. Vanderham argued that the $2.7 billion in fraud reported in the U.S. just a few years ago represents just a fraction of the true tally -- mainly because people are embarrassed to report that they've fallen prey to scams. And the banks and service providers tasked with battling fraudsters face their challenge when it comes to using AI to fight AI. "They're not bound by the same criteria when it comes to leveraging AI and machine learning," Vanderham said.

Visa to buy UK fraud fighting tech provider Featurespace

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Founded in 2008, Cambridge-headquartered Featurespace counts dozens of major financial institutions - including HSBC and NatWest - among the clients for its machine learning-based fraud detection technology. It has raised around $100 million from investors, including Mike Lynch, the technology entrepreneur who recently died on his yacht. Visa says the acquisition will complement and strengthen its portfolio of fraud detection and risk-scoring solutions, enabling clients to protect the payments ecosystem using AI-fuelled technology. In August, Sky News reported that talks about an acquisition were underway at a £700 million price tag. The deal is slated is closed in 2025, subject to customary closing conditions, including regulatory approval. Antony Cahill, global head, value-added services, Visa, says: "Featurespace's strong foundation in AI will enhance our existing product portfolio and enable us to address our clients' most complex and pressing challenges."

Visa Takes On Financial Crime: Acquires AI Fraud Specialist Featurespace, Strengthening Payment Security - Visa (NYSE:V)

The deal, expected to close in FY 2025, strengthens Visa's commitment to enhancing network security through AI. Visa Inc. V shares are trading higher on Thursday. The company inked a deal to acquire Featurespace for an undisclosed amount. Featurespace is a developer of real-time AI payments protection technology that addresses fraud and financial crime risks. This acquisition is expected to enhance Visa's portfolio of fraud detection and risk-scoring solutions, supporting clients globally in growing and safeguarding their businesses. The partnership between Visa and Featurespace is projected to empower clients to manage fraud in real-time and strengthen the payments ecosystem through AI-driven solutions. Also Read: Visa Reportedly Faces DOJ Antitrust Lawsuit Alleging Monopolization Of US Debit Card Market Amid Regulatory Crackdown This investment underscores Visa's commitment to ecosystem security, having invested billions in technology over the past five years to reduce fraud and enhance network security. The transaction, which is subject to standard closing conditions, is expected to close in fiscal year 2025. Antony Cahill, Global Head of Value-added Services at Visa, stated, "Providing our clients with solutions that can adapt to and anticipate the changing threat landscape is of the utmost importance. Featurespace's strong foundation in AI will enhance our existing product portfolio and enable us to address our clients' most complex and pressing challenges." As of June 30, Visa's cash and cash equivalents stood at $19.7 billion. This month, Visa planned to launch an account-to-account (A2A) payment service in the U.K. in early 2025, using open banking technology. Investors can gain access to the stock via iShares U.S. Financial Services ETF IYG and SPDR Select Sector Fund - Financial XLF. Price Action: V shares are up 1.21% at $272.91 at the last check Thursday. Image from Shutterstock Read Next: Visa Stock Has Near-Term 'Overhang' From DOJ Antitrust Lawsuit: Analyst Picks 3 Stocks To Benefit Market News and Data brought to you by Benzinga APIs