SA’s Entersekt snaps up Estonia firm

Financial authentication firm Entersekt has acquired the 3-D Secure software business from Modirum, an Estonia-based digital payment security provider.

It is said to be one of the largest ever outbound acquisitions by an SA company of a fintech abroad, though the parties did not disclose the quantum of the transaction.

Modirum, a 25-year old player, specialises in “card-notpresent” or e-commerce payments. Its cloud-based 3-D Secure technologies authenticate digital payment transactions globally. It processes at least a billion transactions a year for 100-million plus cardholders and more than 200,000 merchants in more than 500 banks in more than 50 countries.

On Tuesday Stellen-boschbased Entersekt said the acquisition allows it to expand its customer base and secure more than 2.5-billion transactions per year, providing a solution spanning the digital, payments and data channels of issuers, acquirers and merchants.

Entersekt is to integrate Modirum’s 3DS solutions into its Secure platform for transaction authentication, and the Modirum team working on 3DS will join Entersekt.

Schalk Nolte, co-founder and CEO of Entersekt, said: “The combined capabilities of Entersekt and Modirum will allow us to offer a wider set of solutions and provide our customers with more data sources to use when protecting against fraud.

“At the same time, we are expanding the types of markets and customers we can serve, enabling us to scale globally and grow faster.”

It is estimated Entersekt’s transaction volumes after the acquisition, will add up to almost half of what the likes of PayPal processed worldwide in 2023.

For 13 years, Entersekt says it has helped financial institutions reduce fraud losses, grow revenue, maintain regulatory compliance and “deliver better customer experiences”.

Its solutions are said to enable financial institutions to reduce risk and fraud, increase revenue and save on costs, as well as expand and retain firms’ customer base.

The acquisition accelerates product development, expands Entersekt’s product offering and enhances the company’s ability to scale and support customers globally.

It also brings a highly skilled team and an impressive list of customers that increases Entersekt’s market share of financial institutions offering 3DS.

Modirum, founded in 1997 and headquartered in Tallinn, Estonia, has staff across 18 countries. It has a strong presence in northern Europe, processing more than 2-million transactions daily through its own data centres.

Standard Bank SA’s telecommunications, media and technology unit was the sole mandated lead arranger for the debt portion of the acquisition.