By Kindness Udoh
As our world becomes increasingly digital, the threat of invasion of privacy continues to increase, causing players in the technology industry to focus on devising newer ways to tackle this problem. Every new solution, it seems, gets circumvented by relentless hackers as internet users are made to provide even more information to ensure the safety of their credentials.
In recent times, we have seen the migration from the use of passwords and Personal Identification Numbers (PINs) to wider and more robust means of security protection. However, many Internet users remain oblivious to the inherent risks of using these passwords and PINs to protect their online information.
As the Central Bank of Nigeria (CBN) introduced the electronic payment system, crystallizing the growth of payment space, so did the exposure towards the inherent risks increase. While this growth is making payment transactions easier for Nigerians, it has however occasioned an increase in the rate of fraud. This fact is highlighted in a recent report by the Nigeria Inter-Bank Settlement System Plc (NIBSS), which stated that the growth in financial inclusion has also created more avenues for fraudsters to carry out their fraudulent activities. It notes that the number of fraud attempts grew by 186 percent from 2019 to 2021, with mobile channels seeing a 330 percent increase while online and Point of Sales (PoS) channels saw a 173 percent and 215 percent increase, respectively. It is expected that there will be an increase in these attempts as more companies push for financial inclusion.
It, therefore, behooves financial service providers such as banks, fintech, technology companies and even merchants to provide measures that ensure secured payment and data of their customers. One of such companies advocating financial inclusion in Nigeria is Africa’s leading integrated payments and digital commerce company, Interswitch, which pays special attention to not just the convenience of using its digital products but also the safety of customers’ data and funds.
What solutions have been provided in the meantime? The battle to outwit Internet fraudsters started as the issuers needed to authorize payment transactions. Initially, there was the voice authorization, which curbed fraud to some extent but was rather slow. To up the ante, the digital payment service providers and technology companies came up with the magnetic stripe on the back of payment cards. The stripe carries the cardholders’ information, which is used to authorize payments. While the stripe was a vast improvement in security, it was however limited due to possible duplicity.
The magnetic stripes lasted for a while but its attendant loss had a huge capital outlay, and so, in came the chip. The first protocol for chip processing was developed by Europay.
Mastercard, and Visa, earning it the name EMV. The cards were either contactless or contact magnetic chip cards. These evolved to the chip and PIN cards, which allowed users to enter a secure PIN as part of the verification process.
In 2009, Interswitch introduced the Verve chip and PIN card into the Nigerian market, following the CBN’s mandate for payment platforms to migrate from magnetic stripe to chip and PIN. Contrary to what was obtainable across other markets, the Interswitch migration was faster, less expensive but equally secure, and this revolutionalised the payment landscape in Nigeria.
As with every chip and PIN solution, cardholders are required to use a PIN on Automated Teller Machines (ATMs), PoS terminals and add passwords when using web channels.
Although the use of the PIN and password has proven to be secure, they also have their limitations as there has been an increased rate of password and PIN theft. From credential stuffing, phishing or password spraying, passwords are susceptible to being stolen and PINs can be hacked. With increasing innovation, passwords and PINs can be protected across payment platforms, especially with the installations of firewalls, encryptions and 2-factor authentication, among others.
Beyond these solutions, it is important that intuitive solutions are developed and driven for adoption among digital payment subscribers. Tokenisation is a new technology that brings an extra layer of security to chip cards, over PINs and passwords. The technology replaces sensitive account information with a unique digital identifier known as a token. With tokenization, online retailers can collect payment more securely, customers are able to check out faster and easier across apps, mobile, in-store and online.
Another intuitive solution is biometric: a tiered layer of protection that presents a complex wall against cyber-terrorists and blocks access to the personal information of digital denizens. With the introduction of biometrics, many users reportedly feel an increased sense of safety regarding their details.
To highlight this sense of safety, a study by AYTM Market Research shows that many Internet users find the use of biometrics to be easier than passwords and believe that biometrics are faster than passwords. The report also showed that 50 percent of respondents in the survey said that they would prefer to do business with banks that offered biometric authentication.
This preference goes beyond speed as Internet users feel that the use of their fingerprints or eye and voice recognition features also present in many smartphones today makes their information accessible by only them and those that they choose to share them with. There’s also the notion that biometrics are far superior to passwords as authenticators.
Despite the availability of fingerprints as a method of authentication for years, users have mostly stuck with what they were familiar with: passwords and PINs. As the years have gone by, Internet users have woken up to the benefits of the multimodal authentication system that has proven to be far more effective.
For this reason, a good deal of organizations, especially those in the financial services industry, have provided multi-factor authentication systems to be able to separate their customers from potential identity thieves, keeping customers happy and the bottom line healthy.
As Nigeria’s digital landscape expands, there is a need for more innovative ways to tackle associated risks with electronic banking. There is also a need to increasingly build trust for the system as the subject of financial inclusion remains a priority. Interswitch, Africa’s leading integrated payment and digital commerce company remain focused on developing and scaling innovation to ensure safe transactions and protect users’ data and funds. The biometric and tokenization solutions are some of the security solutions recently tailored for the Nigerian payment ecosystem.