E-Financial
PAFON 1.0: Experts Harp on Stricter Data Privacy Measures in Payments Ecosystem in AI Era
Mr. Festus Amede, Chairman of the Committee of Chief Information Security Officers of Nigerian Financial Institutions (CCISONFI) has identified Data Minimization Principles, User Consent and Control, as well as Compliance with Privacy Regulations as important elements in protecting privacy in payments.
L-R: Olusola Odediran, Chief Information Security Officer, NIBSS/representative of Chairman, Committee of Chief Information Security Officers of Nigerian Financial Institutions; Chike Onwuegbuchi, co-founder, TechCastle Foundation; Adekunle Ajayi, Product Manager, Cloud and Digital Solutions, inq. Digital Nigeria Ltd; Abidemi Akinola, Chief Compliance Officer, Remita; Efemena Ogie, Head, Partnership, Monipoint Inc., and Peter Oluka, Editor, Techeconomy, during, the Payments Forum Nigeria (PAFON 1.0) event on, ‘Payments: Trust, Security and Privacy in AI era’ held in Lagos recently.
Amede who was represented by an executive member of CCISONFI, Mr. Olusola Odediran (also, the Chief Information Security Officer) Nigeria Inter-Bank Settlement System (NIBSS), spoke during his keynote presentation at the maiden edition of Payments Forum Nigeria (PAFON 1.0) held at Oriental Hotel, Lagos on Thursday.
His presentation themed, ‘Payments: Trust, Security and Privacy in the AI Era,’ explored the critical aspects of trust, security, and privacy in payments, and provided insights into the challenges, solutions, and future trends in safeguarding transactions in the digital landscape.
The CCISONFI chairman stated that although the payment industry enjoys such regulatory oversights arising from the Nigerian Data Protection Act (NDPA) and Data protection laws, the Payment Card Industry Data Security Standard (PCI DSS), and the compliance requirements for businesses, the industry has balanced security and convenience relying on user experience in payment security, seamless authentication methods, and biometric and tokenized payments.
On how emerging Technologies will impact the payment industry, he disclosed that while Blockchain will be deployed to ensure secure transactions, Artificial Intelligence and Machine Learning will be used in fraud prevention even as privacy-preserving computing impact cannot be underestimated.
Amede called on players in the payment industry to continue to educate consumers by providing them with tips on how to secure online payments, how to recognise phishing attempts, and the importance of keeping software updated.
He listed some of the best practices for businesses including regular security audits and penetration testing; employee training on security protocols; and ensuring collaboration with payment security experts.
Speaking further on the need to build trust in payment systems, Amede, who is also the CISO of Zenith Bank Plc emphasised the importance of trust for consumer adoption, transparency in transactions, and commitment to securing the payment infrastructure.
He stated that the Payment Systems are exposed to such threats and vulnerabilities as Cyber Attacks and Data Breaches, Phishing and Social Engineering, and malware and ransomware.
Ikenna Ndugbu, the chief compliance officer, represented by Isoken Aigbomian, the regional sales Manager, Moniepoint, highlighted the evolution of Moniepoint into a leading payment processor, stating, “We started off with a virtual account service where we automated payments or transfers, allowing customers and businesses to make and receive payments seamlessly through transfers. This was what catapulted and was modified into the limelight and household name that seems to be.”
Aigbomian emphasized the company’s focus on providing flexible payment options to businesses across various sectors, stating, “Today, Moniepoint offers a wide variety of payment options to businesses. There is an online payment platform, in-person payments option and then there are the cash payments via our ATM network, which is almost, I think, one of the largest, as well.”
She explained how Moniepoint MFB identified the need for a seamless payment experience and developed innovative solutions to address it. “So, what we did was we looked inward, and we said the most popular means of payment in Nigeria is transfer. So we worked with our engineers and were able to build an infrastructure.”
Roosevelt Elias, the founder of Payble, noted the importance of data privacy and security in the age of digital payments, stating, “It is essential to preserve the details of such trusted transactions, as they often hold significant importance for the company’s outcomes and operations.”
He endorsed cautious use of data and highlighted the need for AI encryption and compliance-based companies to protect user privacy and ensure regulatory compliance.
On the other hand, Peter Evbota, sales director at inq. Digital Nigeria Limited, spoke on artificial intelligence (AI) and its ability to transform sectors, particularly in data analytics and security.
He emphasized the power of AI in processing both structured and unstructured data, highlighting its ability to detect patterns and provide valuable insights.
Earlier in his welcome address, Mr. Chike Onwuegbuchi, co-founder of TechCastle Foundation, organisers of the event, while giving insight into why the forum was berthed, said payments are very critical in the economy of every country including Nigeria.
“Last year, before the elections, we witnessed what Nigerians faced in the payments system- ATMs were not working to dispense cash, and at merchant locations, it was difficult to make payments with banks’ PoS thanks to Moniepoint and few others that came to the rescue,” he said.
Onwuegbuchi noted that there had been issues of declined transactions and customers’ accounts debited, in addition to an existing systemic fraud, misinformation and lack of information that have led to customers losing their money to fraudsters.
“After looking at these issues and many more, we at TechCastle Foundation decided to create a platform where stakeholders could discuss these issues with the objective of making our Payments systems better,” he said.
He stated that the essence of the forum was to make the ecosystem better for every Nigerian as operators, regulators and end users are expected to discuss to find a way to make the system better.
He added that trust issues in payments, security and other industry-related issues were to be discussed at the forum by cybersecurity experts who have distinguished themselves in working with money deposit banks to ensure that cybercriminals didn’t steal money in the bank.
The inaugural edition of the Payments Forum Nigeria was a cross-industry platform that focused on addressing issues that require broad cooperation and coordination across many constituents in the payments industry.
PAFON 1.0, sponsored by Moniepoint, Digital Encode Limited, Cybervergent, inq.Digital and Payble with support from the Central Bank of Nigeria (CBN), provided participants with an inside look at the Payments industry, offering perspectives from key stakeholders, including payment networks, technology innovators, leading merchants, issuers, acquirers, and payment processors.
Central Bank of Nigeria (CBN) has awarded the country’s second Payment Terminal Service Aggregator (PTSA) license to Unified Payments, Nigeria’s premier financial technology company, following a rigorous and transparent process,
The move is targeted at enforcing existing requirement that all transactions from point-of-sale channels in Nigeria must go through a licensed Payment Terminal Service Aggregator (PTSA).
The CBN is enforcing the laws to clamp down on financial crimes and other market misconducts and it aligns with the CBN’s objectives to fully track all electronic transactions in Nigeria, given the propensity of using such transactions to fund insecurity, violent crimes, banditry, kidnapping as well as other vices.
According to one analyst, “By awarding a second PTSA license, the apex bank has proactively responded to industry operators who had expressed serious concerns about channelling all transactions through a single aggregator, the Nigeria Interbank Settlement System PLC (NIBBS), as has been the case for some years.
“With the new policy direction, payments service providers would henceforth route all transactions through either of the two licensed Companies.”
Other financial analysts and industry players have commended the Central Bank, affirming that “the move can be a massive step in the right direction. They also commended the open, transparent, and inclusive manner via which the selection process was managed, and the license awarded.
“The selection process, which lasted for months, began with an invitation for qualified organisations within the payment industry to submit an Expression of Interest document, alongside other requisite documentation and additional capital requirement of N1 billion.”
The new management of CBN decided not to give the license out without going through an open process – and for the first time in licensing a payment service provider – the apex bank went through a public bid process outlined in its publication of Friday, January 5, 2024, in different national newspapers. At the end of the process, Unified Payments emerged as the most preferred service provider.
Unified Payment Services Limited, also called Unified Payments or UP, is a shared service provider within Nigeria’s financial technology sector owned by a consortium of Nigerian banks. For over 26 years, the firm has provided payment technology to banks and other industry operators. The first and only non-bank entity that is a principal member and licensed acquirer of all of American Express, Mastercard, Visa, UnionPay and Payattitude. Unified Payments facilitates both local and international transactions.
Formerly known as ValuCard Nigeria Plc, Unified Payments led the way to introduce POS payments in Nigeria under its card scheme known as ValuCard which is the first payment card to be issued in Nigeria. The company later transformed into a scheme-neutral and option-neutral service provider enabling transactions under different schemes.
The company has continued to provide leading payment technologies and services, enabling different operators to leverage its capabilities and licenses, enabling prompt and seamless transactions.
Among the shareholders of Unified Payments are First Bank, Access Bank, United Bank for Africa (UBA), Guaranty Trust Bank Plc, Zenith Bank and Fidelity Bank. Other shareholders are Citibank Nigeria Limited, Ecobank of Nigeria Plc, First City Monument Bank Plc, Keystone Bank Ltd, Polaris Bank Ltd, Stanbic IBTC Bank Plc, Sterling Bank Plc and Wema Bank Plc.
Chartered Institute of Bankers of Nigeria, CIBN, has expressed support for the ongoing banking recapitalization exercise saying it will empower banks to lend more to the economy.
CIBN President, Dr. Ken Opara stated this yesterday while speaking at the annual lecture of the institute in Lagos, with the theme “Improving Availability of Credit in the Nigerian Real Economy: The Critical Importance of Liquidity.”
Okpara noted that the volume of credit to the real sector activities namely agriculture, manufacturing and services is low compared to their critical role in driving economic growth.
Consequently, he called for more credit to the real sector, saying, “I propose that we consider offering more credit to these key sectors and particularly the agriculture sector. It is for this reason that the Recapitalization exercise is a welcome development.
“The recently announced upward review of the Minimum Capital Requirements of Nigeria by the Central Bank of Nigeria would further empower banks to extend more credit to the economy’s productive sectors.”
To address these factors impeding credit to the real sector, Okpara suggested that, “The government needs to improve further the ease of doing business and infrastructural development, such as power, roads, rail networks, etc.
“Setting up industrial centres where these companies can co-habit and share common infrastructure. Harmonize and reduce the various taxes and levies, including locating them in a single hub.
“Banks need to be deliberate in de-risking these companies via Capacity building programmes, and Advisory services.
Specialised Financial Institutions can be created in addition to the Bank of Industry (BOI), especially credit guarantee agencies and risk-sharing institutions, to further facilitate the deepening of credit as practiced in countries such as China which significantly transformed its economy.
A new report claims that 20 per cent of Nigerians are using Bitcoin to carry out financial transactions every day.
According to the open-source blockchain website, Elastos, the research was compiled from online interviews conducted with 1,407 self-defined ‘tech savvy’ respondents in Brazil, Germany, Nigeria, South Korea, UAE, the UK, and the US.
The interviews were completed by a third party, a registered market research company and completed between 30 March and 04 April ’24.
The report further revealed that 67 per cent of Nigerians would have more trust in Bitcoin to put their life savings than banks and local governments.
The report reads; “The inaugural BIT Index (Bitcoin; Innovation & Trust) – compiled from over 1,400 self-defined ‘tech savvy’ respondents from 7 countries across the globe – sheds light on the actual perception and use of Bitcoin in people’s daily lives, irrespective of its current valuation. Elastos’ BIT Index is part of ongoing research to better track the ‘real world’ use of Bitcoin together with users’ motivations, expectations and barriers around the same.
“In particular, the data reveals the role being played by emerging markets in terms of understanding, usage and confidence around Bitcoin. Nigerian respondents’ levels of usage and trust compare starkly with those expressed from so-called ‘established’ markets such as Germany and the UK and Germany where daily usage levels are just 8% (for German respondents) and (9% for their UK counterparts).
“In terms of the trust – in addition to Nigeria – significant proportions of respondents from Brazil (35 per cent) and the UAE (32 per cent) would have more confidence in Bitcoin-based services to protect their life savings compared to those from markets such as the UK (20 per cent) and Germany (22 per cent).
“When it comes to ensuring the integrity of online transactions, emerging market respondents also revealed their relative confidence in Bitcoin, compared to alternatives. According to the data, 66 per cent of Nigerian respondents and 35 per cent from Brazil have more confidence in Bitcoin-based systems than alternatives such as banks, or national Governments, compared to figures of just 16 per cent (Germany) and 21 per cent (UK) who feel the same.
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