business and security issues in digital payment...
TRANSCRIPT
BUSINESS AND SECURITY ISSUES IN DIGITAL PAYMENT SYSTEMS
Patrick Akinwuntan, FCA
Managing Director & Regional Executive
Ecobank Nigeria.
AGENDA
1. Introduction
2. Definition
3. Digital Payment Methods in Nigeria
4. Benefits of Digital Payments
5. Risks of Digital Payments
6. Requirements of a Secure Digital Payments System
7. Security Issues in Digital Payment Systems
8. NIBSS 2018 Fraud Landscape in Nigeria
9. Business Issues in Digital Payment Systems
10. Potential Risk Mitigation Initiatives
11. Conclusion
INTRODUCTION
DEFINITION
A digital payment system is an electronic mechanism of paying for goods or services instead of using cash or a cheque, in person or by mail.
DIGITAL PAYMENT METHODS IN NIGERIA
Banking cards
V
Mobile WalletsUSSD
Point of Sale (PoS) Internet Banking Mobile Banking QR payment
BENEFITS OF DIGITAL PAYMENTS
Faster, easier and more
convenient
Economical with lower
transaction fees
Waivers, discounts and
cashbacks
Digital record of
transactions One stop solution
for paying bills
Helps keep black money
under control
Lower cost of
processing cash
Deeper and Better
Customer Experience
Increase in Economic
Development
Scale
Efficiency
Disruption
RISKS OF DIGITAL PAYMENTS
Changes in market price, interest
rates and commodity price risk etc.
Fraud, processing errors, system
distruptions, loss of trail,
unanticipated events or disasters.
Risk associated with lending activities,
Liquidity and Interest Rates.
Bank board and management must
understand the risk involved in e-banking
services / digital payments systems
Theft of confidential information,
failure to deliver due to service
disruptions and disclosure
International laws, suspicious transactions ,
cross border transactions and Risk of
changing legislations & KYC issues
Compliance/Legal Risk Market Risk
Strategic Risk Credit Risk
Reputation Risk Operations Risk
Privacy
Communications and data
are kept private
Integrity
Communications have
not been changed
in transmission
Availability
The payment system must be
accessible to users when
ever they need it
Traceability
The data to be transferred
was, in fact, generated by
the signed author
Authenticity
The client and server are
who each claims to be
Requirements of
a Secure Digital
Payment System
REQUIREMENTS OF A SECURE DIGITAL PAYMENTS SYSTEM
SECURITY ISSUES IN DIGITAL PAYMENT SYSTEMS
Fraud & Chargeback
Non reliability of devices and IT infrastructure
Security Risks Innovations in online and web-based channels
Forecast for 2019
Digital Fraud Schemes1
More Mobile, More Fraud Attempts
2
Rogue Apps and Software on Mobile
3
NIBSS 2018 FRAUD LANDSCAPE IN NIGERIA (1/2) A SUMMARY AND ANALYSIS OF E-PAYMENT FRAUDS IN NIGERIA
Number of fraud transactions
25,043
38,852
2017 2018
+55.1%
11,492
38,852
9,471
1,734
272
9,972
3,714
1,996
187
Web
POS
Mobile
ATM
Across the counter
Internet Banking
14Cheques
e-Commerce
Others
Total
599
2,081
497
391
202
163
Mobile
POS
ATM
Others
Across the counter
Internet Banking
Web
14
93
19Cheques
e-Commerce
103
Total2017
2,081
1,632
2018
+27.5%
NIBSS 2018 FRAUD LANDSCAPE IN NIGERIA (2/2) A SUMMARY AND ANALYSIS OF E-PAYMENT FRAUDS IN NIGERIA
Actual loss value of fraud transactions
Naira millions
POTENTIAL RISK MITIGATION INITIATIVES
BUSINESS ISSUES IN DIGITAL PAYMENT SYSTEMS
Payment Integration
Lack of integration can hamper the smooth
flow of services in a digital payments system.
Clean Data
Many organizations have old data stored in
different formats and in silos. Constant need
for data scrubbing to facilitate better service,
reporting and analytics.
Standards
Digital payments system must have standards
that can be implemented across various
countries to facilitate cross border payments.
Entrance of Global Players
Global technology companies such as PayPal, Facebook and Apple
have made significant in-roads into the payments space and could
exclude other payment service providers from offering services on
their platforms
Connectivity Issues with Payments
Factors including poor network connection, double debits for
purchases, or faulty equipment can lead to transaction failures,
creating reconciliation issues for merchants, consumers and banks
alike.
17,260 agents registered,
$1,021 million processed
Over 9.3 million registered,
$2.4 billion processed
126,000 merchants
$47 million processed
Over 220,000 downloads
20,600 registered businesses
$21.5 billion processed in 2018
$435 million processed in
2018Ecobank POS
ECOBANK IS COMMITTED TO BUILDING A STRONG DIGITAL PAYMENTS ECOSYSTEM
IN CONCLUSION
Consumers and businesses have benefited for
the evolution of digital payments
The digital payments ecosystem is constantly
evolving with the influx of Fintech firms and
global tech giants
Regulators cannot afford to sit on the side-lines
Key stakeholders need to ensure compliance
with global standards and collaborate
for success
Overall, the future is bright for service providers
and consumers – both locally and internationally
…
Thank You