Ekata, Seattle, provides tech to help establish a consumer’s online identity and enable merchants to weed out fraud.
"Trust is the key ingredient to conducting digital commerce," the Purchase, N.Y., credit-card giant said in a statement.
"Central to creating trust in a digital world is the ability to prove your digital identity -- who you are, whether you are interacting in person, online or in app."
Ekata uses data to come up with risk scores and other factors that companies can use to "help their customers identify good consumers and businesses and bad actors in real time during online account opening, payments and variety of other digital interactions," Mastercard said in a statement.
Mastercard said it expects to close the deal within the next six months, subject to conditions including regulatory clearances.
The company also expects the deal to dilute its results for no more than two years. The dilution, Mastercard said, reflects the effect of purchase accounting and the costs of integrating Ekata.
The deal comes as many consumers and businesses have been hurt financially by fraud during the pandemic.
Juniper Research predicts “losses tied to online payment fraud will likely balloon to $25 billion in 2024, compared with $17 billion last year.”
“In a fully digital world, you need to be able to verify who’s on the other side,” Mastercard's president of cyber and intelligence solutions, Ajay Bhalla, told Bloomberg in an interview.
“In the physical world, you’re able to present a card, but in the digital world nobody knows who you are. That’s why a digital identity becomes very important.”
At last check Mastercard shares were trading 0.7% lower at $383.50.