In a deal that targets emerging opportunities in the mobile fintech industry, San Diego’s Mitek Systems (NASDAQ: [[ticker:MITK]]) has acquired IDchecker, a global provider of identity and document authentication technology.
Mitek, which provides its mobile check-deposit technology to 3,700 U.S. banks, agreed to pay as much as $10.6 million to gain access to cloud-based technologies IDchecker built to verify users’ identities when they use mobile devices to apply for new bank accounts, loans, and other products and services.
Mitek agreed to pay $5.85 million in cash and $2.75 million in Mitek shares to acquire the Dutch technology company. IDchecker CEO Michael Hagen is also joining Mitek as managing director of IDchecker and corporate identity strategist. The company, based in Haarlem, The Netherlands, could earn another $2 million in Mitek common shares if the Dutch tech firm can meet certain income and revenue targets over the next 16 months.
The deal is intended to take advantage of a massive shift in consumer behavior, Mitek CFO Russ Clark said yesterday. As smartphones proliferate worldwide, users are shifting increasingly to mobile devices to open bank accounts, apply for credit cards, and to make online purchases.
While Mitek still has room to grow its mobile banking business, Clark said, “We also believe there’s a huge opportunity in identity verification in transactions.” In fact, Clark said Mitek believes the market for verifying identities in mobile applications and transactions is bigger than the market for mobile bank deposits.
The deal with IDchecker is intended to enable Mitek to expand from the United States into Europe—and through IDchecker, into the global business of providing mobile capture, facial recognition, and multi-factor identity authentication and document verification technologies, Clark said. Mitek estimates the market could be more than $10 billion by 2020.
By acquiring IDchecker, Mitek gains a complementary suite of technologies that strengthens its own capabilities, and includes the following features:
—Facelink matches the facial image on a driver’s license or similar photo document to the user’s actual face.
—StrongID reads and processes utility bills, bank statements, credit cards, telephone bills, and relevant data documents for mobile identity authentication.
—Easy Onboard processes data from more than 3,500 different ID documents from every country in the world, and complements Mitek’s own mobile technology for opening an account. Mitek says its technology can be used to open a new bank account, get an insurance quote, apply for a credit card, originate a loan, and sign up for products and services.
Clark said Mitek’s own imaging technology for processing mobile deposits has been growing at close to 30 percent a year and is now used by nearly half of the banks in the United States, including all of the top 10 banks and nearly all of the top 50. More than 50 million people use the technology to make deposits, he said.
