Mastercard bolsters threat intelligence capabilities with $2.65 billion deal for Recorded Future

By Arasu Kannagi Basil

(Reuters) - Mastercard has agreed to buy threat intelligence company Recorded Future from private equity firm Insight Partners for $2.65 billion, the payments company said on Thursday.

The acquisition will bring expanded threat intelligence capabilities to Mastercard, which recorded $9 trillion in gross dollar volumes last year, a metric that represents the total dollar value of all transactions processed.

The rapid adoption of new technologies has upped the risk of cyber threats, with companies increasingly facing hacking or ransomware attacks. In June, Arkansas-based Evolve Bank confirmed that it was a victim of a cybersecurity incident with customer data illegally released on the dark web.

Mastercard has been ramping up card fraud detection with generative AI technology.

The company is already collaborating with Recorded Future, which uses AI-powered analytics to identify potential threats, on a service that alerts financial institutions when a card is likely compromised.

Since the launch of the service earlier this year, the rate at which compromised cards are identified has doubled, compared to last year, Mastercard said.

The move (to buy Recorded Future) is consistent with Mastercard's strategic push into value-added services (VAS), with cybersecurity solutions featuring prominently, TD Cowen analysts wrote.

It offers the company another tool for surrounding transactions, both network- and non-network-based, the note said.

The deal, expected to close by the first quarter of 2025, adds conviction to the likelihood of Mastercard achieving mid- to high-teens percentage growth in VAS in fiscal year 2025, the note said.

The New York-based payments firm currently offers cybersecurity services such as identity fraud prevention and real-time decision-making, among others, to its clients.

In 2019, Insight Partners acquired a controlling interest in Recorded Future - which serves over 1,900 clients across 75 countries, including the governments of 45 countries - in an all-cash deal valued at more than $780 million.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Janane Venkatraman)