Tuesday 15 October 2019

Stripe buys Irish payments ID startup as EU beefs up laws

Dublin deal: Billionaire brothers John and Patrick Collison bought Touchtech to help boost security around transactions
Dublin deal: Billionaire brothers John and Patrick Collison bought Touchtech to help boost security around transactions
Adrian Weckler

Adrian Weckler

Stripe, the payments firm founded by the billionaire Limerick brothers Patrick and John Collison, has acquired Dublin-based tech company Touchtech.

The firm, founded by 20something Shekinah Adewumi and Joseph Kuye and later joined by CEO Niall Hogan, makes it easier and more secure to authenticate payments on smartphones. The company's main technology product was designed partly to ease reliance on passwords.

No acquisition price has been announced as part of the deal.

Touchtech previously received Enterprise Ireland funding and a small amount of venture finance. It had previously stated an intention to hire 40 people but currently employs eight.

The Touchtech staff will join Stripe's Dublin office in its engineering, sales and marketing divisions.

Stripe currently employs over 150 people in Dublin but has said that it plans to rapidly increase its headcount after receiving an e-banking licence from the Irish Central Bank earlier this year. It employs over 1,500 people worldwide.

Stripe is currently valued at $22.5bn (€20bn) after raising $100m (€88m) in 'follow-on' finance earlier this year.

Founders Patrick and John Collison are regularly cited as being among the youngest self-made billionaires in the world.

"Concretely, Touchtech helps banks replace those 3D Secure redirects that ask you what you ate for breakfast in 1993 with a single, secure confirmation on your phone," said Stripe CEO Patrick Collison.

The move comes ahead of the EU's Strong Customer Authentication regulation which is aimed at tightening up the security of payments.

The new law, which will require 'two-factor' authentication for more online purchases, comes into effect in September.

Hundreds of thousands of European online merchants are expected to have to upgrade their payments systems to prepare for the upcoming regulation. According to Stripe, if they don't, their transactions "will be declined outright".

"Touchtech adds yet another layer to the economic infrastructure Stripe is building for the internet, which is designed to help businesses comply not only with SCA but also with the entire next generation of regional payment regulations," said Stripe's chief product officer, Will Gaybrick.

Touchtech boss Hogan said that the acquisition would allow the small company to affect a bigger market.

"Stripe has given us more resources, a bigger reach and a great opportunity to continue what we're doing," he said.

"Touchtech's focus is on making it straightforward for banks to provide the best authentication experience to their customers.

"Our technology is used on a daily basis by some of Europe's most innovative startups and challenger banks, like N26, Transferwise, and many others, to enable frictionless and secure authentication on mobile and desktop."

Stripe has raised $745m (€659m) in funding to date, according to Crunchbase.

More than half of this ($495m or €439m) has been raised in the last 30 months as the company seeks to expand rapidly around the globe.

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