Security, the New Payments Ecosystem and the Need to Educate the Consumer (Or Ask Them to Unclog Your Sewer!)
When it comes to any payments ecosystem, you must remember that we are talking about MONEY. More importantly, people’s money (like yours and mine). In any conversation in this space, secure is something that is assumed. A consumer simply won’t use a new system if they don’t believe it is secure. Unless of course it’s free Wi-Fi. As we have seen, folks are willing to do almost anything to get free access on their devices, even agreeing to clean toilets! (This was a real thing… one hotspot operator added it to their Terms of Service fine print). When we talk secure, it’s important that we keep this in mind: secure is not just a piece of the Hierarchy of Payment Needs, it’s an integral part of it, which is why it sits directly on top of the foundations. Without this layer, the whole ecosystem collapses.
The Evolution of Payments
As we leave the comfortable and known confines of yesterday’s payments ecosystem, questions around security are normal and expected. You can’t have trust in something without knowing it’s secure, or that there are fail-safes in place if something does go wrong. In the past, we had very defined payment scenarios, where you knew without a doubt where liability lay if something did go wrong – the ‘unhappy flow’ was accounted for. However, as we move to a more open environment where new parties are joining every day, it is only natural to have your head on a swivel. After all, we are only as safe as the weakest link in our workflows.
Regulation and Recreation
A more open environment means that our sandbox needs to have built-in security, and an ability to manage threats both at the ecosystem level and within our solutions. The flexibility in the new environment, and in the applications themselves, makes this possible today – a marked change to the ‘old’ payments ecosystem. Applying the same logic, agreements and regulations that were in place to manage the older ecosystem will be strained to breaking point in the new ecosystem. This is why we are seeing new regulations like PSD2, The UK Open Banking Initiative and General Data Protection Regulation (GDPR) coming into play.
A major challenge is how we layer in secure elements without impacting the ‘need for speed,’ by which I mean real-time! Luckily for us, Moore’s law is at play, which is making it possible to process information in nanoseconds. But there’s also a change in the user experience; an opportunity to gather information ahead of the transaction and view further upstream than has ever been possible previously. This is thanks to the increasingly “open” nature of payments at the core of our discussion. As we open up access, we create a two-way street: we not only broadcast out payment capabilities, but in return we can marry-in APIs from the broader API ecosystem. Whether those are geo-location based services or facial recognition software, we need to innovate in the secure layer without impeding the speed of the transaction. This may actually make transactions ‘lighter’ and able to move quicker, ultimately propelling us towards a more secure ecosystem!
Getting Your Hands Dirty
While it sounds counterintuitive to some, the New Payments Ecosystem has great potential to not only embrace the need for speed, but also to do so more securely than today. It comes down to embracing the change, rolling up your sleeves and playing with new technology, be it distributed ledger, blockchain, or Open APIs. All have the potential to solidify the baseline assumption of security needed to allow the New Payments Ecosystem to strive.
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