Dive Brief:
- Chinese e-commerce giant Alibaba’s Ant Financial payments affiliate has acquired biometric authentication enabler EyeVerify for about $70 million, with the intent to leverage the U.S. startup's eye-scan technology for securing consumers’ online data and transactions, according to Bloomberg.
- EyeVerify's EyePrint ID technology checks identities through eye-vein patterns: The user holds a smartphone about 12 inches from his or her face to take a picture that can be used to unlock apps or websites, eliminating the need for traditional passwords. EyeVerify claims the approach is more than 99.99% accurate.
- Ant, which operates the Alipay online payment platform, began using EyePrint on its transaction authentication platform earlier this year, and now plans to integrate EyeVerify’s technology into more of its products.
Dive Insight:
This deal marks Alibaba's first acquisition of a U.S.-based company after earlier investments in Snapchat, Lyft, Fanatics and mobile search company Quixey, among others. It shouldn't come as a surprise, since Ant was working with Missouri-based, four-year-old EyeVerify already.
Perhaps what should come as a surprise is that no other company out there saw fit to acquire a startup with an authentication technology that appears to be the ultimate in security at a time when sectors like payments, retail and other industries are fighting increasing security challenges.
Did Alibaba steal a deal that others may come to envy? If EyeVerify's 99.99% accuracy claim is correct, Alibaba and Ant seem to have landed an authentication solution that they can integrate into a number of their existing products, including Alipay. But one also has to wonder if EyeVerify could be an important component in a broader U.S. venture or service that the Chinese giant as yet to announce.
Alipay reportedly supports 450 million customers and services globally, and eventually wants to reach 2 billion worldwide. However, it has only dabbled in the U.S. and only worked with American companies as partners in helping them reach the Chinese market. It would be surprising if Alibaba and its various subsidiaries didn't have more ambitious plans for the U.S. market, and at a time when the payments markets is still evolving, those plans could very well center on Alipay.
If Alibaba and Ant decide to make a bigger play in the U.S. with Alipay, its ability to prove its platform secure will be key, and that's where EyeVerify can come in. Though biometric security is nothing new in payments, eye-scanning technology could give Alibaba a decided edge.
