PayPal has announced that they will be acquiring AI-based fraud prevention firm Simility for $120 million. While PayPal currently owns three percent of Simility, the acquisition allows PayPal to fully integrate Simility into their platform to address the growing issue of payments fraud. PayPal’s acquisition of Simility comes during a time when payments fraud is at an all-time high.
PayPal has announced that they will be acquiring AI-based fraud prevention firm Simility for $120 million. While PayPal currently owns three percent of Simility, the acquisition allows PayPal to fully integrate Simility into their platform to address the growing issue of payments fraud. PayPal’s acquisition of Simility comes during a time when payments fraud is at an all-time high. According to the Association for Financial Professionals (AFP), 78% of U.S. businesses fell victim to payments fraud in 2017, an increase of four percent over the previous year, and the highest percentage ever recorded.. The issue is particularly rampant in ecommerce. A recent survey conducted by Experian shows that 54% of businesses are only “somewhat confident” in their fraud detection methods, and that most fraud prevention efforts have come about as reactions to existing issues rather that preemptive initiatives.Simility, founded by Rahul Pangam, Kedar Samant, and Uttam Phalnikar in 2014, utilizes AI technologies to offer timely risk and fraud prevention. As their Adaptive Decisioning Platform analyzes transaction data, artificial intelligence is able to not only point out likely fraudulent transactions, but also learn and understand complex fraud trends as they occur. With the acquisition of Simility, PayPal aims to not only protect their own systems, but also the millions of customers and merchants who make payments through PayPal. Chief operating officer Bill Ready stated: “Digital commerce has exploded, and fraudsters have taken note, adapting and developing new methods to carry out their crimes. PayPal has been at the forefront of developing innovative fraud prevention and risk management solutions for nearly 20 years, but until now, merchants haven’t been able to configure those solutions to manage the unique complexities of their businesses. Together with Simility, we will be able to put more control in the hands of our merchants to fight fraud while helping make commerce experiences faster and more secure.”PayPal’s acquisition of Simility is expected to be completed in Q3 2018. As soon as the acquisition is complete, PayPal merchants will have access to Simility tools through their existing PayPal account dashboard.
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