June 22: Payment provider PayPal has announced acquisition of Simility in a deal of $120 million in cash. The acquisition is expected to help PayPal in bolstering its fight against fraudulent transactions with the implementation of modern tools for the same.
Simility’s tools against online fraud cater to both buyers and seller transactions. The company monitors digital transactions and buying activity with the help of its set of APIs and beacons that are augmented by machine learning. The company calls its feature as adaptive risk management on the basis that the approach is changed depending upon the threat at that moment.
Simility’s fraud prevention tools also cover physical environment platforms in addition to mobile and web platforms. This would come handy for PayPal in upgrading its tools against fraud transactions, both for its systems and for customers.
PayPal had already been an investor in Simility, and owned three percent in the company which was backed by other companies like Accel, Trinity Ventures etc. Simility was last valued at $52.75 million according to the figures provided by PitchBook.
PayPal Chief Operating Officer Bill Ready acknowledged the existence of configuration issues prevailing among the merchants with regard to fraud prevention and risk management solutions, adding that the acquisition of Simility would help crack that. “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,” he said in a statement.
The deal is expected to close by the third quarter of this year. The SImility tools inside PayPal will initially serve to the existing Simility customers working with PayPal, like eBay/StubHub, OfferUp, Rebtel etc. The services will be expanded to the rest of the merchants once the deal is closed.