Exit Stage Right: Trustev Sells to TransUnion for $44 Million

TrustevHomepage2015

Today, in a blog post titled, A New Chapter, Trustev announced it has been acquired by one of its investors, TransUnion (NYSE: TRU), which went public on the NYSE earlier this year.

Pat Phelan says the exit will “allow us to deeply integrate with TransUnion and put our collective, rich-data sets and advanced technology to work in spotting fraudulent transactions even better than we already do.”

TransUnionIMGThe deal between the two companies, which have been partners since 2014, closed for $44 million. TechCrunch reports Trustev will see $21 million of the amount up front and $23 million more contingent on meeting certain targets.

TransUnion, one of the big-three U.S. credit bureaus, has recently been expanding into fraud and identity-management solutions. In a press release, TransUnion’s president and CEO Jim Peck said:

As fraud grows in volume and sophistication, TransUnion continues to invest in building our global capabilities to help companies manage their risk. Holistic information is a powerful tool to help our customers approve good transactions and prevent fraud, and Trustev’s innovative capabilities are at the forefront of technology in this increasingly critical field.

Trustev, a Cork, Ireland-based company with 15 employees spread across the globe, says its service will not change for current customers. All employees have committed to stay.

Trustev debuted its Retail Decision solution at FinovateEurope 2014 in London. The company’s Retail Decision offers brick-and-mortar retail locations real-time verification of customer identities at the point of sale. TransUnion Interactive, a consumer subsidiary of TransUnion, debuted ZenDough at FinovateSpring 2010.

 

Finovate Alumni News

On Finovate.com

  • “FinovateSpring 2016: Last Chance for presale tickets!”
  • “Exit Stage Right: Trustev sells to TransUnion for $44 Million”
  • “CBANC Network Garners $4 Million in Series B Funding”

Around the web

  • Kony launches Mobile Field Service solution to make field workers mobile.
  • Glassdoor recognizes Credit Karma as one of the Best Places to Work in 2016 in Employee Choice Awards.
  • KPMG and Taulia partner to help organizations improve supplier relations.
  • Prosper launches new investor API platform, as well as developer documentation site.
  • SayPay Technologies and MaxMyInterest win Acceleration Awards in the UBS Future of Finance Challenge.
  • Crains New York Business highlights MaxMyInterest as a New York fintech startup.

This post will be updated throughout the day as news and developments emerge. You can also follow alumni news headlines on the Finovate Twitter account.

Free “Ad-Supported” Credit Scores from Credit.com, Credit Karma, and Quicken Loans

image In August 1997, QSpace (now owned by Experian) was first to bring credit report data to the Web. The cost was $12 per report (see note 1), a price that has changed little over the ensuing 10 years.

Three years later, in October 2000, WorthKnowing.com introduced the concept of ad-supported (i.e., free) credit scores (see Online Banking Report, #66, article reprinted here). But the company failed to make it through the dot-com crash and ceased operations (note 2). Both QSpace and WorthKnowing earned OBR Best of the Web awards for their innovations.

It took seven years for the concept to reemerge, but now two Bay Area rivals are offering free credit bureau info in exchange for permission to present credit and other product offers. And just as I was about to finish this post yesterday, Quicken Loans introduced Quizzle, a personal finance/credit portal that also offers free credit bureau info (yesterday's post here).

Here are the players:

  • image Credit Karma: This San Francisco-based startup, with backing from Prosper's Chris Larsen, is delivering an actual credit score computed by TransUnion, one of the three major U.S. credit bureaus. It does not precisely match the commonly used FICO score from Fair Isaac. And the scale is different, with a top score of 900 instead of 850. The credit score service is still in closed beta, but we'll see if we can get some invites from the company. Credit Karma will be presenting at our FINOVATE Startup conference April 29 in San Francisco, if you want to meet the team behind this new service.
  • image Credit.com: Another San Francisco company, but one that dates back to 1995, recently launched a similar system, called the Credit Report Card. Credit.com CEO, Adam Levine, presented his other company, Identity Theft 911, at our inaugural FINOVATE conference last fall in NYC (video here). Credit.com provides a full evaluation of your actual TransUnion credit report and assigns letter grades to five different components of the overall score (see third screenshot below). The score is shown on a chart at the top that appears to top out at 850. The report is extremely well done. Like Credit Karma, the company earns fees from targeted offers. In our case, we were given a choice of applying for two Citibank cards.   
  • image Quizzle powered by Quicken Loans: Quizzle's business model is completely different because it's run by a financial institution instead of a lead generation site. The idea here is to get customers and prospective customers to use Quizzle frequently so that when the time comes for a new mortgage, the user remembers to apply at Quicken Loans. See yesterday's post for a complete overview.

Credit Karma homepage (15 Feb. 2008)

Credit Karma homepage

Credit.com Credit Report Card homepage (15 Feb 2008)

Credit.com credit report card

Credit.com Credit Report Card (top portion, detailed analysis of each section not shown)

 image

Note:

1. QSpace charged $12 for the first credit report, then $5 each to reorder. Data was from Experian (see Online Banking Report #28).

2. TransUnion now owns the WorthKnowing domain name.

Credit Report Marketers are Faster than Google!

In thousands of searches using Google and other search engines, I’ve succeeded in stumping them a few times, receiving no results on my search expression.

Vantagescore_googleHowever, today I saw something I’d never witnessed before. A Google search for "VantageScore," the new joint credit score from Experian, TransUnion, and Equifax (NetBanker March 14) returned the following (click on the inset for a closeup):

  • Zero mentions of the term
  • Two ads placed against a search term that returned zero documents (click on inset for closeup).

But I guess it had to happen: savvy credit report marketers are moving faster than Google’s spider to lay claim to a new term.

JB

New Credit Score Creates More FUD

Vantagescore_logoFUD (fear, uncertainty, and doubt) is a strong motivator, especially when it has something to do with your personal financial situation.

As much as financial institutions strive to maintain the perception of safety and soundness, they often benefit from the concerns and resulting risk-averse behavior of their customers.

Case in point: credit reports and identity theft protection. Sure, it’s relatively simple to request a credit report every six months to make sure the credit bureaus have accurate info on file under your name. The problem with this approach: it takes time, you must pass rigorous authentication tests each time, you have to remember to do it proactively, and once you successfully access your report, you have to figure out what it all means.

One of the more confusing aspects of the credit report world is the various credit scores available. Each of the three major credit bureaus offer a proprietary score, but the most common one, used by 75% of mortgage originators, is from Fair Isaac, whose FICO score is almost a household word.

Vantagescore_homepageThe new VantageScore is designed to simplify the confusing credit score landscape. Released today, it’s a joint effort from the three major credit bureaus, Experian, TransUnion, and Equifax, who worked together to create a single score incorporating information in all three databases. The new product will be marketed by a separate entity, VantageScore Solutions LLC, <vantagescore.com> a joint venture from the three companies (click on inset for a closer look).

Rather than the 800-point scale in use today, the VantageScore will use a more common academic letter-grade scale as follows:

900-990 A
801-900 B
701-800 C
601-700 D
501-600 F

Analysis
While it should help bring more clarity to the credit score in the long term, the immediate effect is more confusion with a new name, additional marketing campaigns, and a new grading scale. This should be good for financial institutions that can use the raised awareness and heightened concerns to sell their own credit-monitoring services, which can be a solid source of monthly fee revenue.

We’ll be taking a close look at the market during the next six weeks as we research and author an update to our 2002 analysis of the credit report-monitoring opportunity (refer to Online Banking Report #83/84).

JB