PayPal Acquires Israeli Security Company

By Dave Nixon

EBay’s online payments division, PayPal, will pay US$169 million for the acquisition of an Israeli security company specializing in identifying online fraud.

Private company Fraud Sciences, has developed technology designed to differentiate between real and fraudulent transactions, which will be integrated into PayPal’s anti-fraud systems, which will be “significantly” enhanced this year, eBay said.

Fraud Sciences’ chief operating officer, Yossi Barak, and founders Shvat Shaked and Saar Wilf will move to PayPal’s technology and fraud management teams.

PayPal facilitates online money exchange between two users via email addresses. The simplicity by which people can transfer money has also made it one of the most extremely targeted brands for phishing scams, where fraudulent websites imitating real sites are set up in order to embezzle people’s log-in details.

PayPal has taken additional measures to strengthen its defences. Early last year, it began offering a keychain with a one-time numeric passcode that users enter in addition to their log-in and password. The passcode expires after 30-seconds, which greatly diminishes a hacker’s window of opportunity to gain access to someone’s account.

PayPal has also pressed for free email providers to block email sent without digital signatures. That would potentially mean fewer scam emails would land in people’s inboxes, reducing the chance of fraud, although providers have hitherto not made a unified pledge.