Visa's latest deal could signal a new era in fighting digital scams as artificial intelligence-enabled fraud spreads.
The payments giant plans to buy BioCatch, a provider of fraud intelligence technology, for $2.4 billion in cash. Visa said the addition of BioCatch will complement its current security efforts and help clients better protect themselves and their customers from the growing threat of account takeovers, scams, money mules, and application fraud.
BioCatch, founded in 2011 and majority owned by Permira, said it prevents fraud and financial crime by analyzing more than 3,000 data points to recognize patterns in human activity.
Visa shares were down 0.4% at $364.81 in early-afternoon trading on Monday, while the S&P 500 index was up 1.4%. Mastercard shares were up 0.2% at $574.13.
Evercore ISI analysts led by Adam Frisch said BioCatch appears to be a significant addition to bolster Visa's "already formidable security solutions portfolio," and that it will help Visa close "the perceived gap" with Mastercard in a critical area, because the increasing evolution and adoption of artificial intelligence requires better fraud-detection solutions to protect transactions.
BioCatch monitors keystroke activity and AI agent usage to ensure the safety of bank transactions, the analysts wrote. It also addresses "next-gen digital identity challenges by focusing on online user behavior to more effectively fight fraud and drive digital transformation and growth."
BioCatch protects 1.8 billion devices and 760 million users around the world, serving more than 350 banking clients in 21 countries, including more than 100 of the world's largest banks.
"Account takeovers and scams cost the global economy over $1 trillion annually and AI is enabling these attacks at unprecedented scale," said Andrew Torre, Visa's president of value-added services. "BioCatch will help our clients stop fraud before it reaches the point of payment. This acquisition is part of our strategy to help clients prevent cyber threats upstream, building trust into every transaction."
The Evercore ISI analysts note that there has been increasing discussion about the need for enhanced fraud solutions to protect payments in the AI age. Mastercard has a tool called Recorded Future that many consider the top of the line, they said. It bought that threat intelligence technology in 2024 from the private equity firm Insight Partners for $2.65 billion.
"As the all-encompassing 'fraud/security/identity' segment continues to rapidly evolve, we expect both networks to continue to deploy capital and resources in this area to expand their competitive advantages and product moats," the Evercore ISI analysts wrote.
Subject to regulatory approval and other closing conditions, Visa said it expects the transaction to close by the second quarter of fiscal 2027.