Mastercard has agreed to buy Ethoca, a firm that helps merchants and card issuers identify and resolve fraud in digital commerce. Financial terms were not disclosed.

The move comes days after Mastercard bowed out of a bidding war with Visa for Earthport and instead agreed to acquire money transfer network Transfast.

The Ethoca network brings together more than 5000 merchants and 4000 financial institutions around the world. When a fraudulent transaction is identified, Ethoca says it can give ‘near real-time’ information to the merchant. This means the merchant can confirm the transaction, stop its delivery or reverse it to avoid the chargeback process.

As a result, says the firm, both merchants and card issuers benefit from lower operational costs by reducing fraud at the source.

Mastercard says that it plans to scale these capabilities and combine Ethoca with its current crop of fraud-fighting tools as it works to cut the $130 billion in online fraud that retailers are expected to lose over the next five years.

“Ethoca is a strong addition to our multilayered cyber strategy, helping customers take immediate action against fraud and eliminate chargebacks before they can occur,” said Ajay Bhalla, Mastercard’s president of cyber and intelligence solutions

by Bill Boyle
IBS Intelligence Senior Editor