Mobile-authentication technology provider Payfone Inc. has raised another $23 million in a new funding round that included retail card payment services provider Synchrony Financial.
The exact investment from Synchrony Ventures, Synchrony Financial’s venture-capital arm, wasn’t disclosed in Tuesday’s announcement. An undisclosed institutional investor led the funding round. In addition to Synchrony, participants included MassMutual Ventures, the venture fund of Massachusetts Mutual Life Insurance Co.; Anil Aggarwal and Jonathan Weiner, the founders of the Money20/20, Shoptalk and HLTH conferences; and Andrew Prozes, the former global chief executive of LexisNexis.
New York City-based Payfone offers a platform that authenticates mobile phones used for commerce and financial transactions. It links customer data to those devices, and issues a score that assesses the reliability and risk of each device. The company says six of the top 10 U.S. banks use it.
“Our research shows that by 2020, two-thirds of e-commerce sales will be conducted by adults under 40. This next wave of customers will be mobile-first and will expect transactions to be both fast and secure,” Rodger Desai, Payfone’s founder and CEO, said in a news release. “The days of using quizzes, questions, and one-time codes to verify identity are numbered.”
Michael Hensinger, senior vice president and senior managing director of Synchrony Ventures, said in a separate release that “Synchrony’s investment in Payfone represents our continuous commitment to provide our [retailer] partners with fast and easy credit applications and purchasing processes that improve the customer experience.”
A Payfone spokesperson tells Digital Transactions News by email that the company has now raised about $90 million since its founding in 2009. Payments and financial companies are prominent backers. Back in 2011, American Express Co. led a $19 million investment in Payfone. In 2013, Early Warning Services LLC, a fraud-protection technology firm owned by big banks, invested $10 million in the company. Early Warning also provides the Zelle person-to-person payments service, which uses Payfone technology.
Payfone’s board of directors includes Charles Fote, former chief executive of processor First Data Corp., and Cory Davis, Early Warning’s vice president of corporate development.
The spokesperson would not comment when asked if Payfone was considering an initial public offering.