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Security and communications company VeriSign is buying Snapcentric, a maker of transaction monitoring software that can spot fraud, phishing attacks and other threats, according to a company executive.
Details of the purchase were still being resolved late Feb. 8, and VeriSign said it plans to disclose details of the purchase Feb. 9.
The company said it will use Snapcentrics transaction correlation technology to monitor online transactions and spot fraudulent activity for e-commerce customers.
The Snapcentric purchase is part of the response to a recent federal guidance to financial institutions that recommended protections for online transactions that go beyond user names and passwords, said Nico Popp, vice president of the authentication services unit at VeriSign, based in Mountain View, Calif.
Snapcentric, of San Mateo, Calif., and Kfar-Saba, Israel, sells technology that uses an approach known as “autonomous multivariate outlier detection” to spot fraudulent activity.
The company sells software and hardware versions of a verification server that checks user log-in and transaction information against a database of learned patterns.
Irregular or suspicious patterns can be used to generate a fraud alert, or prompt the user to provide additional verification information, according to the companys Web site.
VeriSign said it is interested in Snapcentrics anomaly detection technology because it is capable of “self learning.” VeriSign hopes to feed data through the Snapcentric fraud detection engine from its DNS (Domain Name System) root server and from secure online transactions that it enables, in order to develop more refined detection, Popp said.
VeriSign said in October that it will provide online auction company eBay and online payment company PayPal with a range of security services for online transactions. The announcement was part of a deal in which VeriSign sold its payment gateway to PayPal, an eBay subsidiary.
The Snapcentric technology will help VeriSign provide for online transactions an equivalent to the “invisible” fraud monitoring that credit card companies do behind the scenes for consumer credit card transactions, Popp said.
Fraud detection technology has become a hot commodity in recent months. In October, the FFIEC (Federal Financial Institutions Examination Council) recommended that banks adopt “enhanced authentication methods” for online transactions.
“This is a huge issue for financial institutions … Theyve got to move away from user IDs and passwords for risky transactions,” he said.
In recent months, companies that have a hand in online transactions have been scrambling to develop or buy technology that can spot fraudulent transactions or other online scams, such as phishing and pharming attacks.
In December, RSA Security said it was buying Cyota for $145 million. RSA, of Bedford, Mass., plans to combine Cyotas online security and anti-fraud products with its own authentication technology to give customers a range of security options, the company said.