Wednesday, 18 October 2017

POST Risk

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NEW YORK, NY--(Marketwired - May 03, 2016) - SmartMetric, Inc. (OTCQB: SMME) -- According to a research report conducted by the research organization The Nilson Report, for 2015 through 2020, card fraud worldwide is expected to total $183.29 billion. In 2020, global card fraud is projected to exceed $35.54 billion. Fraud, grew by 19%, and outpaced volume, which grew by 15%. Fraud losses by banks and merchants on all cards issued worldwide reached $16.31 billion in 2014 when global card volume for the same period totaled $28.844 trillion.

From Annual Global Card Fraud to More Than Double Reaching Over $35 Billion in Four Years

My general sense of the industry, without giving away anyone’s figures, is that not only is fraud growing faster than volume, but that merchants are annoyed because declines are growing faster than fraud. We need a sea change in tackling fraud and I think there are two parts to this: changing the security vs. convenience model at the front end and changing the transaction validations model at the back end.

To change how you use money, Open Banking must break banks | WIRED UK

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Open Banking makes it possible to pay with lightning speed directly from a bank account – in effect, creating an Amazon “One Click” for the entire internet.

From To change how you use money, Open Banking must break banks | WIRED UK

I think the use of Amazon in this example is far more disruptive than the author may have intended. Amazon Payments is, in my opinion, precisely the kind of business that will benefit from open banking. It won’t be fintech startups who eviscerate the existing payments industry, it will be the heavy hitters who are able to gain access to the bank account and merge that ability with their colossal resources and gigantic data reservoirs to create a new customer experience.

Royal Bank of Canada's chief executive says data is the battleground for banks that will determine the future success of financial institutions.

From RBC CEO Dave McKay: Battleground for banks is data - Article - BNN

Well, indeed.

Tuesday, 17 October 2017

POST Identity in Vegas

Identity, authentication and authorisation are amongst the hottest of hot topics in our world right now. Even if we put Apple and it’s new face recognition technology to one side, there’s no shortage of excitement at the intersection of biometrics and electronic transactions. Remember this from earlier in the year?

A UK supermarket has become the first in the world to let shoppers pay for groceries using just the veins in their fingertips.

From British supermarket offers 'finger vein' payment in worldwide first

As I wrote at the time, this came only a few weeks after people forwarded me a link from to Time Out, calling attention to a new payment mechanism using a new biometric identification technology to effect retail payments in a new way. The system, called Fingopay, uses a scanner at POS to recognise customers in pubs and bars by the pattern of veins in their finger and then charges a linked payment account. Now, the first time that Consult Hyperion blogged about this technology was more than a decade ago,  talking about mass market uses of biometrics and looking in to the the particular case study of Japanese banking, and it wasn’t new then! The technology has reappeared as a “new" solution to these same problems a great many times since then. It seems like every couple of years or so some stories about this new technology and new way to pay reappear. For example…

The BBC were kind enough to invite me on to their lunchtime “You and Yours” magazine programme to discuss this innovation. I think they were a tiny bit surprised, to be honest, when I told them that the technology was eight years old! I also told them, in the spirit of openness and integrity that is associated with the good name of Consult Hyperion throughout the civilised world, that we had been retained by Hitachi some years ago to carry out a study on the security of this product and its suitability for certain financial services applications.

From We’ll be giving Barclays the finger next year | Consult Hyperion

The truth is that the idea of using fingers instead of cards goes back a long way (I can remember Piggly Wiggly exploring it in 2004) and reappears with regularity. So what’s different this time. Well, for one thing, we now have open banking. With strong customer authentication (SCA), risk-based authentication at POS and standard APIs for third-party access to accounts, retailers and other will soon be able to process payments themselves by obtaining payment institution (PI) licences and obtaining consumer consent for access to their bank accounts. Thus, putting your finger on a reader in store and having the retailer instruct an immediate instant payment transfer from your account to the retailer account looks like a more promising model this time around.

It’s the combination of technology (convenient biometric authentication), business (non-bank third party services) and regulation (open access) that means that the payments world is going to see more change in this space in the next year than in the previous ten. Almost every payment conference in that decade has highlighted the “identity problem” yet no-one was going anything about it. Now we have mass market solutions just around the corner.

Anyway, all of this is a roundabout way of saying how excited I am to be chairing the Money2020 workshop “Identity is Fundamental” in Las Vegas next week. We’re going to be talking about the latest trends in identification technology, authentication in the mass market and much more. And we have a detailed case study from Canada, as we have Toronto Dominion and SecureKey talking about the Canadian banks’ ambitious project to fix the identity problem with, amongst other things, the blockchain. You’d be mad to miss it, so look forward to seeing you in the Titian Room on Level 2 of the Venetian next Wednesday at 8.30am. Oh, and if you want to say hi to me or any of the Consult Hyperion team in Las Vegas next week, just email, tweet or message me on LinkedIn.

In a Cashless World, You'd Better Pray the Power Never Goes Out - Slashdot

Puerto Rico

"Cash only," said Abraham Lebron, the store manager standing guard at Supermax, a supermarket in San Juan's Plaza de las Armas. He was in a well-policed area, but admitted feeling like a sitting duck with so many bills on hand. "The system is down, so we can't process the cards. It's tough, but one finds a way to make it work."

From In a Cashless World, You'd Better Pray the Power Never Goes Out - Slashdot

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If I was the manager of Waitrose after the Woking earthquake, then I would simply accept payment by writing down card numbers, or photocopying driving licences, or taking pictures of customers, or whatever. The core of the issue is identification and trust, not the payment instrument. As many media commentators noted, society in Japan did not collapse. My conclusion: natural disasters are not a convincing argument for cash.

From The disaster in Japan has lessons for payments | Consult Hyperion

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Monday, 16 October 2017

Jewelers Rally After India Anti-Money-Laundering Rule Reversal - Bloomberg

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Shares of jewelers climbed in India after the government withdrew an order that brought the industry under anti money-laundering legislation, a move that comes just as gold buying improves before the Hindu festival of Diwali, the peak season for demand.

Jewelers were included in the Prevention of Money-Laundering Act in August, increasing compliance requirements. Buyers have been shying away from making purchases as they had to provide their income tax identity for transactions above 50,000 rupees ($766), hindering high-value deals.

From Jewelers Rally After India Anti-Money-Laundering Rule Reversal - Bloomberg

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POST Identtiy at the sharp end

A few years ago, I appeared on a programme about internet dating on one of the more obscure satellite TV channels. They wanted a security expert to comment on the topic and since no-one else would do it, eventually the TV company called me. I agreed immediately and set off for, if memory serves, somewhere off the M4 in West London. The show turned out to be pretty interesting. I didn't have much to say, and I can't remember much of what was said, but I do remember very clearly that the psychologist at the heart of the show made a copy of predications.


“Our model also predicts that marriages created in a society with online dating tend to be stronger,”

From First Evidence That Online Dating Is Changing the Nature of Society - MIT Technology Review

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That’s the world in which Blue, the new Twitter-verified-users-only offering from dating app Loveflutter, is claiming to operate in. “In an era of catfishing and fake identities, authenticity is key,” says the accompanying press release, “which is why we’re leveraging Twitter’s world-class verification system to make dating safer.”

From In the online dating jungle, unverified by Twitter doesn’t mean undesirable | Sam Diss | Opinion | The Guardian

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App Annie says that dating apps made up one-third of the top 15 apps by iOS revenue yesterday, along with video and music streaming apps.

From Tinder hits top grossing app in the App Store on heels of Tinder Gold launch | TechCrunch

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In the contactless payment era, why is cash making a comeback? | Business | The Guardian

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Mass cash stashing might signal a widespread fear of a looming apocalypse – or, more prosaically, it could signal rampant illegality.

From In the contactless payment era, why is cash making a comeback? | Business | The Guardian

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