Making the payment landscape more modern and secure

April 08, 2019 | 08:00
As digital payment increases in Vietnam, risk of fraud is also on the rise. Joe Cunningham, senior vice president, Risk for Visa in Asia Pacific, shared with Nam Phuong the new Future of Security Roadmap that the payment firm uses to tackle fraud in Vietnam and drives the digital payment sector forward.
making the payment landscape more modern and secure

Joe Cunningham - Senior vice pesident, Risk for Visa in Asia Pacific

Joe Cunningham is senior vice president, Risk for Visa in Asia Pacific, with responsibility for championing security in the industry and maintaining the integrity of the payments ecosystem. This complex and fast evolving ecosystem includes issuing and acquiring clients, merchants, cardholders, and service providers such as processors, device manufacturers, and payment gateways.

Reporting to Visa’s chief enterprise risk officer, Joe is also responsible for strategic risk management for the business, credit settlement risk, brand protection, fraud management and data security across Asia Pacific.

Joe joined Visa in 2008 with responsibility for all future-focused aspects of Visa’s technology agenda. His accountabilities included defining Visa’s long term technology strategy, chip and mobile payment standards, and Visa’s long-term technology innovation agenda.

From 2009 to 2015 Joe represented Visa on the executive committee of EMVCo, the global payments industry organisation responsible for ensuring interoperability and security of chip-based products; including contact, contactless and mobile-NFC payments.

Joe holds an MBA from Melbourne Business School, and is an honours graduate in Applied Mathematics and Computing.

Can you tell us about the Future of Security Roadmap that Visa plans to implement in Vietnam? Why is this strategy important to Visa?

We recently launched our three-year Visa security roadmap for Vietnam. Overall, the plan includes different changes and investment that Visa and our clients will make to continue to protect payment security and every merchant, every Visa cardholder in Vietnam.

This new plan showcases our commitment to supporting the growth of digital economy here in Vietnam. Businesses are growing and the Vietnamese government sees the value of the digital economy to propel the economy forward and increase the global competitiveness of Vietnamese businesses. At the heart of this growth is the payment system, and we believe Visa has an important role to play, thanks to our world-class technologies and leading position in innovation and security.

We have a number of concrete goals for the roadmap. Firstly, Vietnamese consumers should feel very confident about using their cards to make purchases either in the physical world or on the web. This is possible because they trust Visa with their personal information and transaction details. Consumers should also feel confident that their bank is protecting, monitoring, and managing fraud and security on their behalf. Lastly, if emergencies happen or if fraud takes place, consumers are reassured that their money is well-protected by the bank and by Visa.

With these goals in mind, the roadmap lays out different activities that Visa and our clients will do in Vietnam to protect the trust that the Vietnamese consumers have in us. We must work hard to deserve that confidence and trust.

Our approach with this roadmap is four-pronged: devaluing data, harnessing data, protecting data, and empowering customers. In 2019, we will focus on the adoption of global security and acceptance standards, encouraging issuers to install real-time fraud systems and third parties to register, extending our safety net.

However, from 2020 onwards we will strengthen our security requirements by introducing stringent security and technology standards. For instance, by April 18 all issuers will have implemented 3-D Secure 2.0, while from July 1, all acquirers will need to use payment gateways that support EMVCo tokens.

Through this roadmap, by 2021 we will see cardholders sufficiently empowered to have adequate oversight of their card usage and to feel secure in a largely transformed digital payment environment.

making the payment landscape more modern and secure
Around two-thirds of Southeast Asian consumers are concerned about the use of personal information when carrying out mobile phone payments. With this in mind, Visa is implementing a security roadmap to ensure that Vietnamese consumers can feel confident when making transactions both via online banking and using chip cards with the latest technology.

With the digital landscape constantly changing, how can we know if the roadmap includes the right technology investments? What if one country feels the need to adjust the roadmap based on their own needs?

The first answer is the roadmap will be continually updated and adjusted to reflect the market at the time. Secondly, most of the things in the security roadmap are based on global standards, from EMV cards, GPNV, point of sale and EMV tokenisation to the three secure solutions. It is cheaper and more secure to invest based on standards so that you will not be surprised by a new technology.

Visa is a very important participant in these global standards, but individual market might adopt different standards because they want more flexibility and uniqueness, or because they think a tailored approach is better. Overtime, this has been proved incorrect because global standards are cheaper and more secure. This is why we always recommend the global standards and our roadmap is built on these criteria.

Prior to this roadmap, we have also conducted the Visa Consumer Payment Attitudes study, which reveals that security remains a key consideration for consumers across Southeast Asia, with 67 per cent concerned about the safety of their personal information when using their mobile phone to make payments. When asked specifically about what their top three concerns were when using their mobile phones to make payments, consumers in Vietnam said losing their phone or getting their phone hacked. These insights are also important for us to develop the roadmap.

Vietnam is planning to switch 70 million magnetic swipe cards to chip ones. Do you think that this is a feasible goal, and how can Visa help with it?

It is only a matter of time until all bank cards in Vietnam become chip cards. Obviously, we are encouraging every market in the world, every one of our clients to issue chip cards and almost every market now has moved to EMV. If you look at the regional figures, in places like Singapore, Thailand or Malaysia, the percentage of Visa transactions using Visa chip cards at a chip terminal is almost 100 per cent. As more and more magnetic-stripe only cards get converted into chip cards, this figure will continue to increase.

Visa is definitely committed to supporting this switch. First, we provide the technology standards and incentives so that our clients feel encouraged to use chip cards. This is crucial, because if banks issue a chip card and the merchant only has a magnetic stripe point of sale, then if there is fraud, the merchant is liable for it. The same problem goes for magnetic strip cards used at chip-only points of sale. When fraud happens, either the issuer or the merchant, whoever is still using magnetic stripe, will be held responsible. This is also why we try to help them make the right investments in chip cards and protecting their payment system.

Clearly, educating merchants and consumers about the benefits of chip compared to magnetic stripe is vital. During the transition period from swipe to chip, we allow customers to have the option of either swipe or use the chip. If that does not work, you can also enter the card number to make the payment.

Of course, we want every case in the world to use chip cards, ideally contactless. In most markets now, merchants are commonly coming to accept contactless payments, EMV payments, and mobile payments. And that is a very important technology that Visa has developed currently.

Now the cost for card issuing is incredibly inexpensive. The life cycle of cards is not a concern either, since a card can last up to 10 years. And lastly, the benefits of cards far outweigh the cost of issuing one or operating terminals for EMV or contactless payments.

I have a lot of confidence that our clients in Vietnam will continue to replace the magnetic cards in time to meet the deadlines that the government has issued. There are many capable and sophisticated banks that are doing an extremely good job in security against fraud. I am very confident that they will meet the final move to EMV.

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