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Writer's pictureFraud Practice

MasterCard Acquires Ethoca, Post-Transaction Provider Pioneer

MasterCard announced on March 12 their acquisition of Ethoca, pioneer of the chargeback or issuer alert service. The acquisition is expected to close by the end of the second quarter and terms of the deal were not disclosed.


Ethoca came to market in 2005 with the first card issuer-to-merchant collaboration network, their Ethoca Alerts service. This network allows Ethoca’s now 4,000 financial institution partners to communicate disputed transactions with their more than 5,000 merchant clients, allowing the merchant to respond and potentially avoid a chargeback. These services, known as issuer alerts, can help organizations reduce costs and lower chargeback rates.


Ethoca is not MasterCard’s first major acquisition in the Card Not Present payments and risk space. This acquisition comes less than two years after they acquired NuData Security, a pioneer and market leader in the behavioral monitoring and analytics space, as well as Brighterion, a modeling and analytics provider. While those acquisitions had applications to bolster MasterCard SecureCode and improve smart authentication with 3D Secure 2.0, the Ethoca acquisition brings assets related to post-transaction management.


This acquisition was recently announced and not many details have been disclosed, but one could speculate that the Ethoca network is an asset MasterCard will leverage with the planned improvements and changes to their chargeback process. These changes are coming in several planned phases, with Phase 3 scheduled for October 18, 2019, but there are no public details about what is occurring during this phase. The final phase, Phase 4, will include streamlining the existing chargeback process and takes places April 17, 2020.


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