PayPal spends US$169m on risk management firm

28 Jan 2008

Online payment company and eBay subsidiary PayPal has acquired Israeli online risk management company Fraud Sciences.

The value of the sale is about US$169m. Fraud Science’s risk tools and analytics will be used to enhance eBay’s and PayPal’s proprietary fraud management systems.

Fraud Sciences’ ground-breaking technology differentiates between real and fraudulent transactions with unprecedented accuracy, according to the Tel Aviv-based firm.

“Integrating Fraud Sciences’ risk tools with PayPal’s sophisticated fraud management system should allow us to be even more effective in protecting eBay and PayPal’s hundreds of millions of customers around the world,” commented Scott Thompson, president of PayPal.

Key Fraud Sciences personnel will join the company’s technology and fraud management teams.

The acquisition is expected to close within the next 30 days. EBay’s 2008 financial guidance issued along with its 2007 Q4 results will not be affected by the acquisition, the company said.

By Niall Byrne