PayPal buys CyActive to create Israeli security hub

CyActive is a predictive cyber security startup, detecting future malware before it hits

As mobile payments, and the digital wallet, become more prevalent, it is imperative that security be a top issue for companies providing that service. Just look at what recently happened to Apple Pay; the service itself was not hacked, but some people were able to use loopholes to exploit it for fraud. That kind of thing is really unacceptable, and its untenable if mobile payments are ever expected to become widely popular.

PayPal agrees with that notion, and is looking to beef up its security with the purchase of Israeli predictive cyber security startup CyActive, which it announced in a blog post on Tuesday. No financial terms of the deal were disclosed.

"Security has always been a top priority at PayPal," James Barrese, Chief Technology Officer and Senior Vice President of Payment Services at PayPal, wrote.

"For more than 15 years, we’ve been committed to keeping millions of people’s money safer online. While we have industry-leading fraud models and verification techniques, and a world-class security team, we’re always looking for ways to make our systems even more secure to stay well ahead of cybersecurity threats."

Founded in 2013, CyActive is a predictive cyber security company which positions its clients ahead of potential cyber threats, by predicting and preventing future attacks.

It is unclear what will happen to the CyActive brand going forward, but PayPal did disclose that it made the purchase to help establish a new security center in Israel, located in Beer-Sheva.

"Located in one of the world’s top cybersecurity hubs, this new security center will allow us to tap into the country’s cutting-edge technology and top cybersecurity talent. Our goal is to extend our global security leadership, and bolster our efforts in predictive threat detection and prevention," said Barrese.

PayPal has already established a Fraud and Risk Detection Center in Tel Aviv, and the new center will be an extension of that.

For CyActive, the company wrote in a blog post that being purchased by PayPal will help it grow faster than it otherwise would have been able to.

"PayPal is a company that shares our values and  views security as a top priority. We are excited by the prospect of dramatically expanding our global reach and believe our combined efforts will help to build a leading security center for PayPal," wrote CyActve founders Liran Tancman and Shlomi Boutnaru.

"The emerging cyber-security ecosystem in Beer-Sheva provided us the ideal environment for our success. We are delighted that PayPal has chosen to locate their new security center in Israel."

The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected it to close early in the second quarter.

CyActive raised an undisclosed amount of funding from JVP and Siemens Venture Capital in September. 

This is PayPal's second acquisition in just the last week, after it bought  mobile payment platform Paydient to expand its reach to off-line retailers.

VatorNews has reached out to both CyActive and PayPal for further information regarding what will happen to the CyActive brand going forward. PayPal declined to comment, and CyActive was unavailable at this time. We will update this story if we learn more. 

(Image source: cyactive.com)