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Payment Security Predictions for 2021

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In parallel to this pandemic-stricken year in which time often seemed to stand still, global economies moved quickly in ways that accelerated change, bringing lasting impact to consumer behavior, fraud patterns and risk mitigation needs.

This year, Visa has focused our expertise and resources in ways to help financial institutions, merchant partners, governments and consumers navigate these seismic shifts. Looking ahead to next year, I believe many of the changes in digital payments will carryover. More importantly, the experiences of this year will accelerate innovation and force companies to learn from their mistakes to ensure they are not repeated in 2021.

A few predictions for the upcoming year include:

  1. Consumer habits born from the pandemic will become the new normal, requiring updated fraud prevention strategies by merchants.

According to Visa’s Back to Business Study, 78 percent of global consumer respondents have adjusted the way they pay for items due to intensified safety concerns and nearly half (48 percent) would not shop at a store that only offers payment methods that require contact with a cashier or a shared machine like a card reader. I believe these consumer preferences are not temporary and are here to stay.

These consumer behaviors will further drive merchants to innovate in order to grow and meet customer preference. Investments by merchants in new ways to onboard customers and new ways to pay such as online, in-app, contactless, and IoT (wearables, in-car, smart speakers, smart appliances, etc.) will be rewarded through new customer acquisitions, existing customer retention and growth in sales.

But as merchants move online, so are fraudsters – some of which have resources backed by nation-states. Payment security is difficult and not everyone in payments has the expertise to do it well. Merchants will need to update their fraud prevention strategies to support omnichannel commerce and if in-house expertise is not available, merchants should turn to proven, reputable partners that can produce outcomes aligned to their business goals and interests.

  1. The Strong Customer Authentication requirement will help bolster payment security outside of the EEA and UK.

The requirement for Strong Customer Authentication (SCA) and enforcement for e-commerce starts Jan. 1, 2021 for most of the European Economic Area (EEA) with some local variations among countries. Despite this being a requirement for the EEA and the UK, efforts to strengthen and meet SCA requirements will reverberate in other regions. With the increase in fraud activities in card-not-present channels, some multinational corporations will likely extend the strengthened security measures to other markets where fraud activity is high.

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  1. Modernizing payment infrastructures will reveal new potential vulnerabilities.

A growing number of Central Banks and fintechs are challenging tradition and exploring new and faster ways to send money, settle payments and share information. Real time payments, digital currency and Open Banking supports innovation that matches the expectations of digitally savvy consumers and will help drive digital commerce for decades to come. But faster payments open up opportunities for faster fraud and sharing of customer information must have data privacy in mind.

 

Fintechs and Central Banks need to have mechanisms in place to spot atypical patterns that can be an indicator of fraud. It is also important that the principles of Open Banking and the sharing of data is used responsibly and ethically across all products, services and technology. 2021 will see payment volumes in real time payments continue to grow, digital currencies continue to become mainstream, consumer and data privacy at the forefront of many discussions, and industry players working together to resolve new vulnerabilities that are revealed.

 

  1. Government agencies will implement stronger authentication measures due to fraud losses in 2020.

Fraud activities spiked during the first phase of the pandemic in the U.S. Government benefits meant for vulnerable citizens affected by the pandemic were targeted by fraudsters by using stolen identities to apply for benefits – effectively siphoning away the funds making fewer funds available to individuals who needed them the most. The potential loss could be more than $26 billion nationwide.

 

Government agencies will want to avoid further losses if additional government stimulus is made available in 2021 and will do so by revisiting their processes and technologies used to support the verification of eligibility and distribution of benefits. Strengthening authentication capabilities to better assess government benefit eligibility must be a priority next year. This is a call to action to all government agencies that play a role in the disbursement of benefits.

 

If agencies do not have the expertise to do this in-house, they should turn to trusted partners in payments. Financial institutions, payment networks and processors globally need to prepare now to ensure adequate fraud prevention layers and strategies are in place so government benefits reach their intended recipients – not fraudsters.

 

  1. Momentum behind digital identity will continue to build led by a shift to strong customer authentication solutions

The move away from passwords and knowledge-based authentication will accelerate with adoption of strong customer authentication standards like FIDO, which is now available in all major browsers and mobile devices.

Plans for government and bank-led electronic identity schemes (e-ID) will advance along with trust frameworks and regulation to inform how the various parties can interact. Accelerated by Covid-19, demand for solutions that help banks and merchants digitally verify consumer identity will grow. Relying parties who are unable to manage identity effectively will become targets for fraud.

 

The concept that digital identity is one of the building blocks required for a sovereignty to function in the digital age (along with open data, consumer privacy and consent management, and payments) will gain further traction. All eyes will be on Europe as adoption of the SCA mandate comes into effect next year since digital identity is among the options to choose from for stronger authentication before payment.

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Features

INEC Votes Technology in a Season of Untruth, By Okoh Aihe

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INEC Votes Technology in a Season of Untruth, By Okoh Aihe

While our law makers were voting for a journey to the past penultimate week, by turning their back on modern technology in the conduct of elections, two significant things happened one after the other. Richard Branson went to the edge ofspace aboard Virgin Galatico’sSpaceShip Two on July 11, 2021.  Nine days later, on July 20, the richest man in the world, Jeff Bezos was on his way up there, on a journey the world has tagged the race of the billionaires.

In between, the National Assembly took a vote on the Electoral Amendment Bill and voted against the transmission of election results by electronic means. It was a major disappointment for some non –government organisatriiosns (NGOs) and some Nigerians who had prayed for the National Assembly to disappoint them by doing something that is good, by voting yes, just this once, to redeem some of their very deplorable image. It has been fire literally and the nation is aghast with anger. In July 2021, the law makers said some parts of the country are so underdeveloped in terms of telecom infrastructure rollout that it was not possible to execute any electronic transmission of election results. And a particular one boasted irritably that he uses Thuraya phone in his village. And that Thuraya cannot transmit data?

READ ALSO: INEC Seeks Replacement of Manual With Electronic Voting

But let’s return to the billionaires. Those ambitious guys with lots of bucks to throw around –Jeff Bezos ($209.2bn) and Richard Branson ($4.7bn) who are spinning the next frontier of business into reality by organizing space tourism where a rider could pay as much as $250, 000 for a seat, if you decide to go with Virgin Galatico.

So, why am I linking the serious matter of space to the burlesque at the National Assembly? Just to say that the world is moving on. People are planning every day and whether we decide to remain on the same spot in this part of the world and continue to quarrel with providence for doing us wrong, life must go on and people must still go the edge of space to behold the beauty and fragility of the earth from up there. But that is life. You will have those who fly high and those who fly very low, struggling for the base concerns of life. Our politicians make the world hold us in ridicule.

Anyway, in trying to unshroud the entire process, the National Assembly invited the Nigerian Communications Commission (NCC), regulator of the telecommunications industry, and the Independent Electoral Commission (INEC) who is in charge of election matters in the country. As it turned only the NCC went to the Assembly as INEC said it never really got any official invitation.

NCC has made its submission which outraged a number of people but INEC has responded indirectly through several media appearances of its officials to the effect that it had the capacity to go the way of technology in conducting elections,having received assurances from service providers. While NCC vacillated and tilted towards impossibility the data on ground and previous statements from the Commission put a lie to such submission. The Commission’s position has been fact-checked and incredulity is preponderant.

“We were bewildered by the NCC position because these were the same compatriots that had worked with us,” said Nick Dazang, INEC’s Director of Publicity and Voter Education, on AIT KAKAAKI programme.

Dazang observed there were inconsistencies in the amended Bill. How do you do electronic voting and remove electronic transmission of results? It is counterproductive.

He admitted that there were security challenges across the country but INEC has had to face some of these challenges in the past to organize elections that were acceptable. According to his story which is so well known to most people above the age of 10 in Nigeria, there has been insurgency in the North East since 2011. In all these years elections have been conducted in the States of the Region without fail.

“If we could develop a template to conduct elections there, why can’t we transmit results using technology?” he asked.

There continues to be disbelief within INEC just as it is in the larger Nigerian society. People are angry why our politicians in the National Assembly, a majority are smiling over a potentially dangerous move, trying to justify a position that is dismally selfish and only aimed at political preservation into the future.

In the sordid tragic-comic story, some stakeholders, especially the operators, have remained silent. So silent that even when they have been told that the network they have built in over two decades didn’t have the appetite for modern transmission, none of them has said anything.

When this writer reached out to some operators over the weekend, one official said: “I do not understand why NCC will give 2018 numbers. Why would they do that when the operators supply the regulator all the latest data? I don’t want to accept that NCC sounds political.”

READ ALSO: Senate Turns Down PDP Request Of E-Transmission Of Election Results

But do you have the capacity to do it, to carry the election results through your network backbone? The source was cautious explaining that there is no city in the country that has hundred percent coverage, just as there can hardly be any environment where there is no coverage at all. “Anywhere without a coverage may not have significant population otherwise an operator would put a base station there so as to provide services and make money.” Although everybody is expected to vote and the votes counted, the source maintained that such population may not be significant enough to affect the outcome of the elections.

Simple answer. Yes, we have the capacity and capability, but know that even in the cities there are blind spots where such electronic transmission may not be possible. The source also explained that operators were ready at any time to be informed of such environments so that they can escalate their service deployment.

The source expressed the fear that what is playing out at the National Assembly may have little to do with technology but more of the concealed agenda of the politicians who would never have moments to reflect on how low their image has plummeted.

The Nigerian politician is only concerned about tomorrow which may be too far for his aspirations. So in a fit to shore up the impossible he piles untruth on technology, so that he can continue to live in the shadow of sin. The politician wants to eat up the future so as to set the teeth of his children on edge. How very ironic. Unfortunately the younger generation are too smart for their old tricks, and will fight to redeem their future, using that same technology.

 

Okoh Aihe writes from Abuja.

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National News

GenU: Airtel Partners UNICEF To Empower Nigerian Youths

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GenU: Airtel Partners UNICEF To Empower Nigerian Youths

Telecommunication company, Airtel Nigeria, says it has partnered with UNICEF to empower Nigerian youths through the newly launched Generation Unlimited (GenU) initiative.

Airtel in a statement on Tuesday said that the multi-sector partnership was aimed at empowering 20 million young Nigerians by 2030 with education, skills acquisition, employment, and entrepreneurship while leveraging access to digital platforms.

GenU is aimed at urgently supporting expanded education, training, and employment opportunities for young people aged 10 years to 24 years on an unprecedented scale.

READ ALSO: GenU: FG, UNICEF To Inaugurate Scheme For Young Nigerians

The collaboration is a global multi-sector partnership that was initially launched in September 2018, in collaboration with over 200 partners.

Segun Ogunsanya, Airtel Nigeria Chief Executive Officer, said the initiative aligns with the telco’s philosophy of connecting, empowering, and helping young Nigerians to become more productive to solve some of the pressing problems affecting the country.

“At Airtel, we believe that leveraging on technology, digital platforms, mobile broadband, and innovation can make a huge difference in creating both access and opportunities for youth even among those in the remotest and hard-to-reach locations in the country,” he said.

Ogunsanya pledged that Airtel would support the GenU initiative by providing connectivity and access to the Internet for every school and learner by zero-rating data cost.

He said the telco would also offer internship opportunities to participants as well as provide awards to some of the beneficiaries at the end of the training.

“In the long term, Airtel will fully support GenU through a partnership to develop an investment case for school connectivity leveraging our technical competence.

“It is our belief that through this partnership, we will go a long way to improve the skillsets of millions of young Nigerians across the country, which is one of the cardinal objectives of the government,” Ogunsanya said.

Also, Prof. Yemi Osinbajo, the Vice President, commended Airtel, UNICEF, and other stakeholders for backing the GenU initiative with a clear deliverable of providing education, training, and entrepreneurship opportunities for 20 million Nigerians in 10 years.

The Chief Executive Officer, of GenU, Mr. Kevin Frey, also commended Airtel for its pledge of providing connectivity, access, internship opportunities, and awards for the beneficiaries, noting that the success of GenU in Nigeria was a success for Africa and the world.

Frey said that during the pilot phase of the program, Airtel would focus on providing zero-rated data to support 200 schools in Lagos and Kano States.

GenU has reached more than 100 million young people globally through innovations and programmes in more than 40 countries across six continents.

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Economy

PenCom Develops App To Automate Pre-Retirement Enrollment

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PenCom Develops App To Automate Pre-Retirement Enrollment

The National Pension Commission (PenCom) on Tuesday announced that it had developed an online application to automate pre-retirement verification and enrollment.

A statement signed by the commission’s Head, Corporate Communications, Mr. Peter Aghahowa, in Lagos, said the application had the capability to register, verify and enroll prospective retirees of treasury-funded Federal Government Ministries, Departments, and Agencies (MDAs).

Aghahowa said PenCom would test-run the online enrolment application between Aug. 2 to 20 with selected MDAs.

READ ALSO: FG Inaugurates 16 Board Members Of PENCOM

He stated that the MDAs would be selected across the six geopolitical zones in the country, including the Federal Capital Territory (FCT).

“Accordingly, the online enrolment application would be hosted on the PenCom website.

“As a prelude to the formal deployment of the online enrolment application, PenCom would commence a pilot run of the exercise from between Aug. 2 to 20.

“This will be done with selected MDAs in the six Geo-Political Zones and the Federal Capital Territory (FCT) in order to test-run the application with real-time data,” he said.

He said the application would go live after a test run on a date to be announced by the commission in due course.

The PenCom spokesperson explained that the affected retirees or prospective retirees were expected to undergo the data recapturing with their respective Pension Fund Administrators (PFAs), as a pre-requisite for the online enrolment.

Aghahowa said the data recapturing entailed updating personal details and providing National Identification Number (NIN).

“However, retirees or prospective retirees who have already undergone the data recapture exercise with their PFAs are not required to repeat the exercise,” he said. 

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