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Visa (V) to Buy Cardinal to Boost Security in Online Services
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With consistent focus on fraud prevention in e-commerce, Visa Inc. (V - Free Report) is set to acquire Mentor, OH-based CardinalCommerce, a leading company in the e-commerce payment authentication industry. The deal is expected to close in early 2017.
Financial terms of the transaction remained undisclosed. In its release, Visa noted that the acquisition will allow safer and efficient seamless payments, made through any channel, including browser and mobile app. Also, the planned acquisition will help Visa’s clients and merchant partners in driving digital commerce.
While at present, Visa already offers Cardinal’s services to merchants and acquirers through its CyberSource merchant and acquirer wing , the San Francisco, CA-based payment network giant will leverage on its global reach to expand Cardinal’ products and services.
Interestingly, the proposed acquisition will support Visa’s tokenization strategy. The Visa Token Service is a security technology that does not require cardholder information like account numbers and expiration dates, but uses a unique digital identifier or “token”. This token can be used for payment without divulging more sensitive account information of the cardholder.
Visa intends to integrate tokenization into its rapidly-growing consumer product – Visa Checkout – over the next 18 months. The company stated that the Cardinal acquisition will facilitate smooth integration of 3-D Secure and delivery of the new fraud solutions to merchants.
Identifying the need of more protection in transactions – Mark Nelsen – senior vice president of Risk and Authentication Products at Visa stated, “This strategic acquisition combines Visa’s industry expertise and Cardinal’s critical role in payment authentication to bring added security to online transactions, reduce fraud, and support digital commerce which is the fastest growing commerce segment today.”
Mike Keresman, founder and CEO, Cardinal mentioned, “By combining our authentication expertise and role in supporting both merchants and issuers, and Visa’s payments expertise and global reach, our two companies will be able to fast track the next-generation of digital authentication.”
Visa shares have lost 2.7% year to date, as against 3.9% growth for the Zacks categorized Financial Transaction Services industry. Though the company remains well poised for growth on the back of its solid market position and significant opportunities from the secular shift toward electronic payments, some of the key near-term concerns include high client incentives and the weakness in European economy.
Bats Global Markets : The Zacks Consensus Estimate for 2016 moved up 3.6% to $1.43 for 2016 and 6.5% to $1.64 for 2017 over the last 30 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Compass Diversified Holdings LLC (CODI - Free Report) : The Zacks Consensus Estimate for 2016 has moved up 1.4% to $1.43 for 2016 and 1.7% to $1.78 for 2017 in the last 30 days. The company flaunts a Zacks Rank #1.
Meta Financial Group, Inc. (CASH - Free Report) : Over the last 30 days, the Zacks Consensus Estimate increased 10.3% for both the current year and 2017 to $6.53 and $7.50, respectively. The company boasts a Zacks Rank #1.
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Visa (V) to Buy Cardinal to Boost Security in Online Services
With consistent focus on fraud prevention in e-commerce, Visa Inc. (V - Free Report) is set to acquire Mentor, OH-based CardinalCommerce, a leading company in the e-commerce payment authentication industry. The deal is expected to close in early 2017.
Financial terms of the transaction remained undisclosed. In its release, Visa noted that the acquisition will allow safer and efficient seamless payments, made through any channel, including browser and mobile app. Also, the planned acquisition will help Visa’s clients and merchant partners in driving digital commerce.
While at present, Visa already offers Cardinal’s services to merchants and acquirers through its CyberSource merchant and acquirer wing , the San Francisco, CA-based payment network giant will leverage on its global reach to expand Cardinal’ products and services.
Interestingly, the proposed acquisition will support Visa’s tokenization strategy. The Visa Token Service is a security technology that does not require cardholder information like account numbers and expiration dates, but uses a unique digital identifier or “token”. This token can be used for payment without divulging more sensitive account information of the cardholder.
Visa intends to integrate tokenization into its rapidly-growing consumer product – Visa Checkout – over the next 18 months. The company stated that the Cardinal acquisition will facilitate smooth integration of 3-D Secure and delivery of the new fraud solutions to merchants.
Identifying the need of more protection in transactions – Mark Nelsen – senior vice president of Risk and Authentication Products at Visa stated, “This strategic acquisition combines Visa’s industry expertise and Cardinal’s critical role in payment authentication to bring added security to online transactions, reduce fraud, and support digital commerce which is the fastest growing commerce segment today.”
Mike Keresman, founder and CEO, Cardinal mentioned, “By combining our authentication expertise and role in supporting both merchants and issuers, and Visa’s payments expertise and global reach, our two companies will be able to fast track the next-generation of digital authentication.”
Visa shares have lost 2.7% year to date, as against 3.9% growth for the Zacks categorized Financial Transaction Services industry. Though the company remains well poised for growth on the back of its solid market position and significant opportunities from the secular shift toward electronic payments, some of the key near-term concerns include high client incentives and the weakness in European economy.
VISA INC-A Price
VISA INC-A Price | VISA INC-A Quote
Currently, Visa carries a Zacks Rank #3 (Hold).
Stocks to Consider
Bats Global Markets : The Zacks Consensus Estimate for 2016 moved up 3.6% to $1.43 for 2016 and 6.5% to $1.64 for 2017 over the last 30 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Compass Diversified Holdings LLC (CODI - Free Report) : The Zacks Consensus Estimate for 2016 has moved up 1.4% to $1.43 for 2016 and 1.7% to $1.78 for 2017 in the last 30 days. The company flaunts a Zacks Rank #1.
Meta Financial Group, Inc. (CASH - Free Report) : Over the last 30 days, the Zacks Consensus Estimate increased 10.3% for both the current year and 2017 to $6.53 and $7.50, respectively. The company boasts a Zacks Rank #1.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>