Payment technology company ACI Worldwide Inc. (Nasdaq: ACIW) is spending $205 million for Retail Decisions plc as a means of attaining a range of new security tools.
Retail Decisions, also known as ReD, works with companies to analyze e-commerce payment data such as the transaction size and the user's location to spot potential fraud attempts. Naples, Florida-based ACI expects the various products ReD offers — ReD Shield, ReD Fraud Xchange, ReD PRISM, ReD Alerts, ReDi, ReD1 Gateway and LiveProcessor — to help the company tackle various vulnerabilities in online data and data breaches.
Retail Recisions is headquartered in Providence, Rhode Island.
Given that it is a significant problem in the U.S., consolidation in the fraud prevention market makes sense, observers note.
"There are a number of companies out there providing innovative solutions, from platforms such as ReD to point solution providers, so I think partnership or acquisition is a very smart way for processors to add robust card-not-present fraud prevention capabilities," says Julie Conroy, a research director for Aite.
Al Pascual, an analyst specializing infraud and security for Javelin Strategy & Research, agrees.
"I expect that acquisitions and mergers in this space will continue as merchants and issuers demand more capabilities and vendors attempt to control the cost associated with them while maximizing profits," Pascual says.
Bank of America Merrill Lynch (NYSE: BAC) is advising ACI on the purchase, while William Blair is handling the sale of Retail Decisions.
Anthony Noto contributed to this report.