American Express Acquires Mobile Authentication Provider
Fraud prevention is driving payments acquisition activity, with two major moves by the networks in the last two weeks. American Express has acquired InAuth Inc., a provider of mobile device authentication and intelligence solutions, which follows Visa’s announcement of its plans to acquire e-commerce authentication specialist CardinalCommerce, which operates the largest authentication network in the world, according to the company.
InAuth’s technology is used by large financial institutions, payments networks and merchants to mitigate risk and help identify potential fraud using its mobile-first device authentication services. American Express said the acquisition positions the network to “capture new opportunities as more consumer activity—from payments to account origination and servicing—moves to digital channels.”
The acquisition follows an investment in InAuth made earlier this year by American Express Ventures, the payments network’s strategic investment arm. In November, InAuth announced a partnership with Early Warning, the consortium of major U.S. banks working to develop the Zelle mobile P2P payments network.
As transactions and fraud migrate to online and mobile channels, payments providers and merchants are working to provide security that protects transactions without disrupting the checkout experience to avoid shopping card abandonment.
Founded in 2011, InAuth’s platform uses device authentication to evaluate the potential risk of a digital transaction. American Express already uses InAuth’s technology as part of its broader fraud management capabilities, and InAuth’s services also are sold by Accertify, a subsidiary of American Express that offers e-commerce fraud management and chargeback services to merchants. Under terms of the acquisition, InAuth will operate as a wholly owned American Express subsidiary, with CEO Lisa Stanton continuing to lead InAuth as president, reporting to Jaromir Divilek, senior vice president, global network business, American Express.