UNITED STATES | ACI Worldwide will acquire Retail Decisions (ReD), a leader in fraud prevention solutions for an all-cash purchase price of $205 million. The deal is to close in the middle of the third quarter 2014.
With ReD, ACI will become the market leader in the rapidly growing payments risk management market across multiple segments globally. ReD helps merchants and businesses drive up revenues while reducing fraud losses and fraud management costs.
Fraud attempts are expected to shift toward the card-not-present
As payments increasingly move online, the focus on card-not-present fraud prevention will also increase. According to market research from eMarketer in a February 2014 report, the global ecommerce market is projected to grow over 17 percent each year, representing a total value of nearly $2.4 trillion by 2017.
Further, as the U.S. moves toward adoption of EMV standards, fraud attempts are expected to shift toward the card-not-present online segment.
According to Julie Conroy, Research Director, Aite Group, “Merchants around the world, and banks for that matter, should prepare for a very sharp increase in card-not-present fraud. Without significant preventative efforts by issuers and merchants alike, we’re going to see pretty dramatic increases.”
'ReD enhances our issuer risk management solutions'
“ACI and ReD together have an unrivalled merchant retail solution – global, omni-channel with integrated fraud management built on Universal Payments technology.
This solution will not only guarantee a consistent, unified customer experience in any retailer modality, but also will be a key part of our real-time commerce, any-to-any transaction strategy.
Additionally, ReD’s consortium models, business intelligence offerings, modelling and risk analyst expertise will both complement and enhance our issuer risk management solutions.”, said Philip Heasley, President and CEO, ACI Worldwide.
Terms of the Transaction
If closed in the middle of the third quarter, 2014, ReD is expected to generate approximately $18 million in revenue and $4 million in adjusted EBITDA for the remainder of 2014. ACI Worldwide and ReD have entered into a definitive transaction agreement under which ACI Worldwide will acquire ReD for $205 million in cash. The transaction is subject to customary closing conditions.