Today Israeli news provider Globes online reported that PayPal has acquired an Israeli startup called FraudSciences for $169 million. Fraud Sciences has the emerging technologies that help users in detecting online frauds. In a press release to the public, they also announced that key personnel from FraudSciences, including Yossi Barak, Chief Operating Officer and founders Shvat Shaked and Saar Wilf, will join PayPal’s technology and fraud management teams. In the meantime, Gadi Maier, FraudSciences’ President and CEO, will provide strategic and operational support to PayPal during the integration period.

FraudSciences was founded in 2001 but in fact was officially launched to the market in 2006, previously raised $7 million in Series A and $11 million in round B financing from BRM Capital, Redpoint Ventures and other US and Israeli investors.

PayPal, an eBay company, was started in December 1998. It is a successful person-to-person payment services company not only in the U.S., but throughout the world. The method of PayPal in transfer money electronically to other account holders has gained popularity for the past years and thus, more than 100 million accounts PayPal accounts opened. The main reason for their rapid growth is due to their viral strategy, real-time access to the money transfer, and the fraud protection. According to PayPal’s recent press release, they have reached another new milestone by achieving nearly 35 million accounts in Europe. Their services are spread rapidly in the UK, Germany, France and Italy. Moreover, the study of Forrester Research showed that 23% of the European online shoppers are prefer to pay with the PayPal system.

“PayPal has worked hard to build a safe and convenient payment service specifically tailored to European e-commerce,” said Brent Bellm, vice president of PayPal Europe. “PayPal lets consumers pay using the card or bank of their choice, without ever having to retype their financial information or share it with the merchant. In Europe, choice, convenience, and privacy are what make PayPal such a popular way to pay.”

PayPal system is an innovation. But they want to accelerate diffusion by first enabling payments using mobile phones and other mobile devices, according to this article. If money could be securely used in paying an item on the web through a mobile device, enormous opportunities were opened for them in the future.

It seems that almost all big firms are looking for opportunities on the mobile device, mobile search, mobile games, now PayPal’s mobile payment system. But I wonder how these companies achieve economies of scale in the mobile business model.