As Digital Payments Heat Up, Fiserv Agrees to Acquire Card-Control Technology Provider Ondot

Fiserv Inc. announced Wednesday an agreement to acquire, for an undisclosed sum, Ondot Systems Inc., whose technology includes so-called card controls, or tools that allow cardholders to switch usage on or off according to considerations of security or preferred usage. The deal is expected to close in the first quarter of 2021.

Fiserv plans to leverage Ondot’s platform to help clients accelerate digital customer acquisition, drive digital commerce, increase card activation and usage, reduce service costs, and engage consumers on a personal level through multiple channels including card-based payments, digital banking platforms, and merchant solutions.

Other services provided through the Ondot platform include card account application through mobile devices, digital debit or credit card issuance, detailed transaction and merchant data to help consumers recognize transactions faster and reduce chargebacks, and real-time offers pushed to consumer’s mobile wallets. Fiserv sees such services as complementary to its current offerings.

“The importance of digital has accelerated and consumers are increasingly turning to online and mobile banking, as well as contactless payments experiences,” said Frank Bisignano, president and chief executive of Fiserv, in a prepared statement. “By combining Ondot and Fiserv capabilities at scale, we plan to provide our clients with a unified digital experience, spanning card-based payments, digital banking platforms, core banking, and merchant solutions, enabling them to deliver best-in-class solutions that continue to reduce friction for their customers.”

Ondot’s platform allows financial institutions to push digital cards to a consumer’s mobile wallet, enabling faster onboarding of new customers and card replacement, along with higher activation rates, the company says. Cards that are instantly issued and pushed to digital wallets have a close to 100% activation rate, and 70% are used within five days, according to Ondot’s Web site. If a card is lost or stolen, Ondot’s platform allows consumers to instantly lock the card.

San Jose, Calif.-based Ondot enriches transaction data by identifying such merchant information as the merchant’s name, business hours, location on a map, and contact information so cardholders can recognize their purchases more easily to reduce chargebacks. In addition, cardholders can track transactions from monthly subscriptions, and card-on-file merchants, such as online marketplaces or ridesharing companies to better understand their spending patterns.

Card issuers can also leverage Ondot’s platform to send consumers relevant messages including account alerts, special offers such as overdraft protection for checking accounts, and links to their credit score from Experian.