Visa has signed an agreement to acquire software company Featurespace, with the financial payments giant negotiating a potential £700 million deal according to reports from Sky News.

Cambridge-headquartered Featurespace develops real-time artificial intelligence (AI) payments protection technology that aims to prevent and mitigate payments fraud and financial crime risks.

As part of the deal, Visa aims to expand and strengthen its fraud detection and risk-scoring solutions division to offer improve fraud protection.

Visa said that the acquisition will combine both companies’ expertise to enable firms to manage fraud in real-time and further protect the payments ecosystem by integrating AI powered solutions.

Antony Cahill, global head of value-added services at Visa, emphasised the importance of providing Visa’s clients with solutions that can adapt to and anticipate the changing threat landscape.

“Featurespace’s strong foundation in AI will enhance our existing product portfolio and enable us to address our clients’ most complex and pressing challenges,” he said.

The tech firm was founded at Cambridge University’s engineering division, and since its inception in 2008 it has been focusing on developing algorithmic-based solutions to analyse transaction data and detect sophisticated fraudulent activities.

The software specialist has developed a number of platforms that aim to facilitate fraud detection, including Adaptive Behavioural Analytics, Automated Deep Behavioural Networks and ARIC Risk Hub, an open technology to combat fraud and financial crime.

HSBC, NatWest, TSYS, Worldpay, Danske Bank, Akbank, Edenred and Permanent TSB have used technology from the provider.

Featurespace has been backed by a number of private investors including Chrysalis Investments, Highland Europe, IP Group plc, Insight Partners, MissionOG, and TTV Capital.

UK based IP Group, which has invested a total of £22.9 million since 2012 in seven financing rounds, said it expects to receive £134 million in cash from the deal.

Visa added that it has been investing “billions of dollars in technology”, including to reduce fraud and enhance network security.

Dave Excell, Founder of Featurespace, said: “Over the past 12 years we have served the financial services industry, building a company that has gone from strength to strength, and we are thrilled to become a part of Visa. With Visa, we can bring the innovation, integrity and purpose of our platform and our team to more payment service providers and ultimately, stop more people from becoming victims of financial crime.”

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