In a move to expand its tokenization services, Visa Inc. announced Tuesday that it has a deal to buy the token and smart-ticketing businesses of Rambus Inc., a Silicon Valley chip and software provider.
The purchase price is $75 million in cash, according to a regulatory filing from Sunnyvale, Calif.-based Rambus. The token business is part of Rambus’s Smart Card Software Ltd. subsidiary, which will go to Visa under terms of the acquisition and includes the former Bell ID mobile-payment businesses and the Ecebs smart-ticketing systems for transit providers.
Visa appears to be getting a good deal, since Rambus bought United Kingdom-based Smart Card Software for $104.7 million in early 2016.
Established in 2014 and now available in 100 markets, the current Visa Token Service replaces payment card numbers with unique identifiers that make digital payments more secure because the identifiers are of little use to fraudsters. With the acquisition, Visa said it can extend tokenization beyond Visa cards to other types of payments, including real-time payments and domestic payment networks.
“As the way people and businesses pay and get paid continues to evolve, the addition of Rambus’s technology will allow us to deliver greater security beyond the card to support more transactions, payments systems, and participants,” TS Anil, Visa senior vice president and global head of payment products and platforms, said in a news release. “Going forward, we will apply these expanded capabilities, expertise, and scale to help further all forms of global commerce.”
Rambus didn’t specifically say in the release why it is selling Smart Card Software, and why the sale price is less than Rambus paid for it. A spokesperson did not respond to a Digital Transactions News request for comment by late Tuesday morning.
Rambus did indicate that growth prospects for the token business might be stronger under Visa’s wing. Plus, Visa has nearly 250 transit-payment projects under way around the world that represent potential markets for the ticketing systems. “Joining forces with Visa as a payments leader will allow the group to scale technology and capabilities to deliver new products and services to the market, while continuing to partner with existing customers,” Jerome Nadel, senior vice president and general manager of payments and ticketing at Rambus, said in the release.
Visa expects the acquisition to close in the third quarter.