Security and innovation in the payments industry

Bitcoin, NFC, mobile banking, cloud computing – technology is moving forward, and so should payments security. Or so was the consensus at this year’s Payments Knowledge Forum, which provided an encouraging medium for an intense discussion of the challenges facing the payments industry today.

Over two days and a wide variety of lectures, the Forum looked toward the future of payments, and analysed several trends that have shaken the industry over the last few years.

Payments Knowledge Forum chairman David Smith opened the event by pointing out that many of the changes that payments industry is witnessing is not actually due to a change in technology, but a change in the consumer. Mobility is now an essential part of any successful product, one that a new, informed consumer demands.

In order to provide the necessary security the payments industry should not ignore the benefits of data encryption. Tokenisation was a key recommendation from Brendan Rizzo, EMEA Technical Director at Voltage Security. After the Target breach, where the retailer apparently ignored warnings as 40 million credit card numbers—and 70 million addresses, phone numbers, and other pieces of personal information gushed from its system, there is evidently an on-going arms race between hackers and the payments and retail industries. The payments industry must keep up, rather than bury its head in the sand.

Dr Steven Murdoch discussed a frightening denial of the weaknesses of chip and pin devices in his keynote address, demonstrating simple tricks to hack into the systems and make phony debit card transactions. His team, working from UCL, informs banks and payments regulators of the weaknesses his research exploits, but continually finds these weaknesses ignored.

The second day of this year’s Forum included an entire strand dedicated to retail, as those with brick and mortar stores must fight for sales with purely e-commerce brands by stepping up their web presence. Now, m-commerce makes up 50 per cent of online shopping traffic, and retailers need to constantly innovate in order to raise conversion rates.

“We had a well-attended and inspirational series of retailer stream presentations and we were much more successful than last year at attracting participants such as Marks & Spencer, Boots, John Lewis, the Co-operative Group and Sainsbury’s,” said Denys Whitley, director of operations at the Payments Knowledge Forum. “One of our goals, having our origin more amongst banks and processors, was to encourage greater retailer participation.”

Still, security was a key issue in this strand, and John Rozeck, director of Polar Movement, encouraged point-to-point encryption in retail transactions.

Key presentations also covered bitcoin adoption, NFC and mobile payments adoption, and PCI security standards.

This year’s Payments Knowledge Forum created the ideal environment in which to foster engagement, network building and information-sharing for key members of the payments industry, who will be able to apply this shared knowledge to the future of payments.

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