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Visa to Acquire Token and Ticketing Businesses From Rambus

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Visa Inc. (V - Free Report) recently entered into a definitive agreement to purchase the token services and ticketing businesses — formerly called Bell ID and Ecebs LTD — from Rambus (RMBS). However, the deal is subject to certain closing conditions.

The consolidation of Visa’s network tokenization abilities with Rambus’ local and account tokenization technology is expected to lead to secure and safe transactions across international commerce. Visa is one of the market-leading companies in tokenization technology that swaps sensitive payment information with a unique identifier, also known as token. This token makes the transactions more safe and sound.

Tokenization has been one of the most prominent methods of curbing fraud and securing card transactions at the point-of-sale, online and for stored card credentials. Visa provides these solutions via Visa Token Service for card-based transactions on the Visa network.

With the addition of Rambus’ token technology, Visa will be able to ensure the safety and ease of tokenization to alternate payment types other than Visa cards, such as those made on domestic card networks, real-time and account-based payment modes. The company might extend these knowhow and scale to further enhance all forms of global commerce in the future.

Notably, Rambus would be able to come up with a new product and service suite while continuing to cater to its current customers.

Since the inception of Visa Token Service in 2014, the company has made a significant progress in making and scaling tokenization for card-based payments. It is impressive that Visa has made 100 markets tokenization-friendly by offering this solution to 90% of its total payment volume, of which more than 60 global token requesters were recently added to the platform.

Apart from tokenization, Rambus’ digital ticketing portfolio and knowledge in transit go well with Visa’s effort to provide global transit and mobility solutions to public transit operators, technology partners and cities across the globe. Visa has transit projects underway around the world and it will diligently work for public transport operators, clients and partners to develop novel mobility solutions and acceptance.

Shares of this Zacks Rank #3 (Hold) company have rallied around 29.2% in a year's time, outperforming its industry's growth of 22.8%.


Stocks to Consider

Investors interested in the same space may take a look at some better-ranked stocks like Cardtronics PLC , Mastercard Incorporated (MA - Free Report) and Global Payments Inc. (GPN - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardtronics offers automated consumer financial services through its network of automated teller machines and multi-purpose financial services kiosks. The company pulled off average four-quarter positive surprise of 43.8% and sports a Zacks Rank #1.

Mastercard provides transaction processing and other payment-related products and services. It delivered average four-quarter positive surprise of 5.8% and carries a Zacks Rank #2 (Buy).

Global Payments offers payment technology and software solutions and came up with average four-quarter beat of 3.1%. The company is a Zacks #2 Ranked player.

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