Fifteen shareholders in fintech startup Touchtech Payments will benefit from the company’s acquisition by Stripe.

Deal consideration was not disclosed but is likely to be substantial, as Touchtech has a focus on Strong Customer Authentication (SCA). The European Commission wants to combat online credit card fraud by instructing merchants to implement SCA on their online checkout pages from September 2019.

At the moment, financial institutions and merchants implement risk-based assessments of online payments. This means that customers can buy online without providing their password in a system such as Verified by Visa or MasterCard SecureCode (3-D Secure), unless some unusual online behaviour is observed.

Merchants don’t like 3-D Secure because people forget their passwords, leading to checkout abandonment rates in excess of 25%. Ahead of SCA implementation, developers of payments security products have been scrambling to come up with solutions that are more consumer friendly than 3D-Secure.

Touchtech Payments, based in DCU, says its modular online authentication product can be used to authenticate just about anything, from online payments to loan agreements to banking logins.

In Association with

Touchtech was established in 2014 by Shekinah Adewumi (24) and Niall Hogan (32) and the firm will relocate to Stripe’s R&D hub in Dublin  following the acquisition. The two Meath founders owned c.42% of the company equity. Other substantial shareholders are Francis Rice and Pascal Ryan, who invested €500,000 in the venture’s early days. Former EY Entrepreneur of the Year Patrick Joy was also a backer through his vehicle Commodore Investment, with an 18% stake.

• Download complete list of Touchtech Payments shareholders

The company had equity investment of €1,190,000 in December 2017 and had accumulated losses of €1,267,000. The staff count reduced to 11 people that year from 16 the year before. In recent funding rounds, ten shareholders were tapped for €165,000 last December, while Commodore Investments invested €136,000 in April 2019..

Taxpayers backed the venture with €250,000 invested through Enterprise Ireland. The EI shares were redeemed by the company on April 9.

Stripe employs c. 1,000 people globally, including over 150 in Dublin.

Photo: Niall Hogan (left) and Shekinah Adewumi