Equifax to acquire Midigator to expand its digital identity footprint

Midigator’s automated, data-driven chargeback prevention and chargeback dispute management solutions complement the Equifax Kount Identity Trust Global Network. Equifax’s solution uses artificial intelligence (AI) to link trust and fraud data signals from 32 billion digital interactions, 17 billion unique devices, and five billion annual transactions across 200 countries and territories.

Midigator offers a technology platform designed to automate the dispute response process and to provide real-time data businesses need to know why chargebacks are occurring in the first place and better understand their customers. The resulting granular, post-transaction data, and digital signals complement the Equifax Kount dataset and augment AI-driven Kount preventative fraud products to combat the illegitimate chargebacks known as ‘friendly’ fraud as well as criminal fraud activities.

By combining the Kount pre-authorisation and preventative protection capabilities with Midigator’s complementary post-authorisation and automated chargeback technologies, Equifax aims to provide a complete solution that improve customer experience while helping businesses to protect and recover revenue.

The transaction is subject to customary closing conditions and is expected to close in the third quarter of 2022. The acquisition is not anticipated to have a material impact on 2022 Equifax financial results. As part of the transaction, LLR Partners, who invested in Midigator in 2018, will exit the business.

The great chargeback surge

With the rise of global ecommerce sales, expected to hit USD 5.5 trillion in 2022, transaction disputes and chargebacks are also surging. Global omnichannel digital payments are also expected to grow from 2.6 billion users in 2020 to over 4.4 billion in 2025, dispute and chargeback rates present growing problems for businesses around the world.

Fraugster’s Payment Intelligence Report 2022 shows that chargebacks remain a problem, with a 46% of the total being filed within a span of just 60 days.

Moreover, Justt Customer Attitudes Towards Chargebacks in 2022 survey shows that both UK and US consumers now routinely rely on chargebacks to vent dissatisfaction with the products and services they receive. American shoppers were markedly more aggressive than British consumers in their use of chargebacks across all industry verticals, and were also more likely to file serial chargebacks, with 15% of respondents filing five or more disputes in 2021. In the UK, about one in 10 shoppers filed three or more chargebacks over the past 12 months.

According to the official press release, there is a strong demand from companies for digital identity and fraud prevention solutions that encompass the entire customer journey, specifically around the desire to mitigate and manage post-transaction issues.