In parallel with 2020, when pandemics often seem to be stagnant, the global economy is moving rapidly in ways that accelerate change, perpetuating consumer behavior, fraud patterns, and risk mitigation needs. It had an impact.
This year, Visa focused its expertise and resources on how to help financial institutions, merchant partners, governments and consumers survive these quake changes. I think that in 2021, many of the changes in digital payments will be carried over. More importantly, last year’s experience accelerates innovation, forcing companies to learn from mistakes and prevent them from being repeated in 2021.
Here are some forecasts for this year:
1.1. Consumer habits born of pandemics have become a new norm and require the latest fraud prevention strategies by merchants.
According to Visa’s Back to Business Study, 78% of global consumer respondents are adjusting their product payment methods due to heightened safety concerns, with nearly half (48%) being cashiers or A shared machine like a card reader. I think these consumer preferences are not temporary and will stay here.
These consumer behaviors drive merchants to innovate further in order to grow and meet their customers’ tastes. Sellers’ investment in new customer onboarding and new payment methods such as online, in-app, non-contact, IoT (wearables, in-vehicle, smart speakers, smart appliances, etc.) will be rewarded through the acquisition of new customers. Retain existing customers and grow sales.
But as merchants move online, so do scammers. Some of them have resources supported by the nation-state. Payment security is difficult and not everyone who pays has the expertise to do it well. Merchants need to update their fraud prevention strategies to support omni-channel commerce. When in-house expertise is not available, merchants need to rely on proven and trusted partners who can produce results that are in line with their business goals and interests.
2.2. Strong customer authentication requirements help enhance EEA and non-UK payment security.
The requirements for strong customer certification (SCA) and e-commerce enforcement will begin on January 1, 2021 in most European Economic Areas (EEA), but will vary from country to region. This is an EEA and UK requirement, but efforts to strengthen and meet the SCA requirement have been well received in other regions. With the rise of fraud on non-card-presenting channels, some multinationals may extend enhanced security measures to other fraud-prone markets.
3.3. Updating the payment infrastructure reveals new potential vulnerabilities.
More and more central banks and fintechs are challenging traditions and looking for new and faster ways to transfer money, settle payments and share information. Real-time payments, digital currencies and open banking support innovation that meets the expectations of digitally savvy consumers and help drive digital commerce over the coming decades. However, faster payments open up faster fraud opportunities, and sharing customer information should keep data privacy in mind.
FinTech and central banks need to put in place mechanisms to find atypical patterns
It can be an indicator of fraud. It is also important that the principles of open banking and data sharing are used responsibly and ethically across all products, services and technologies. In 2021, payments in real-time payments will continue to grow, digital currencies will continue to become mainstream, consumer and data privacy will be at the forefront of much debate, and industry players will work together to reveal. Resolve new vulnerabilities.
4.4. Government agencies will implement stronger authentication methods due to fraudulent losses in 2020.
Scams surged in the first stages of the U.S. government’s pandemic Scammers targeting vulnerable citizens affected by the pandemic use stolen IDs to apply for profits and effectively suck up funds , Reduced the funds available to the individuals who need it. most. Potential losses can exceed $ 26 billion nationwide.
Government agencies want to avoid further losses if additional government stimulus is available in 2021 and will use the processes and technologies used to support eligibility verification and profit sharing. Do so by reviewing. Strengthening certification capabilities to better assess the eligibility of government benefits must be a priority this year. This is a phrase that encourages action on all government agencies involved in paying benefits.
If the agency does not have the expertise to do this in-house, you will need to ask a trusted partner for payment. Financial institutions, payment networks, and processors are now ready to ensure that appropriate fraud prevention layers and strategies are in place to ensure that government interests reach intended recipients rather than fraudsters. need to do it.
5.5. The momentum behind digital identities continues to be built on the move to strong customer authentication solutions
The transition from password and knowledge-based authentication is accelerated by the adoption of strong customer authentication standards such as FIDO, which are now available on all major browsers and mobile devices.
Government and bank-led electronic identity scheme (e-ID) plans move forward with trust frameworks and regulations to communicate how different parties can interact. Accelerated by Covid-19, the demand for solutions that help banks and merchants to digitally identify consumers will increase. Relying parties who cannot effectively manage their identities are the target of fraud.
The concept that digital identity is one of the components that sovereignty needs to function in the digital age (along with open data, consumer privacy and consent management, and payments) will get even more attention. Digital ID is one of the options you can choose for stronger authentication before payment, so when the adoption of SCA mandate comes into effect, all attention will be directed to Europe.
Bevan Smith is responsible for risk: Visa Sub-Saharan Africa.
2021 Payment Security Forecast
https://businessday.ng/opinion/article/payment-security-predictions-for-2021/ 2021 Payment Security Forecast