E payment review dec 2017 new by E-Payment Review

E-PAYMENT REVIEW NIGERIA'S FINTECH 50: INNOVATORS SHAPING THE DIGITAL PAYMENT SPACE

YEAR-END EDITION

Vol. 07. No. 04 December 2017

PERSON OF THE YEAR __________________ IKECHUKWU NNAMANI CEO, MEDALLION COMMUNICATIONS

E-PAYMENT REVIEW December 2017

EPAYMENTREVIEW.COM

E-PAYMENT REVIEW Vol. 07. No. 04 | | Dec 2017

BROWN N. UGBAJA Editor ONAJITE REGHA Projects Editor Sub Editor KUSHIMO OLUWAYEMI Editorial Assistant LUCY AKOKOTU

Published by E-Payment Providers Association of Nigeria

In This Issue December 2017 Okey secure fob | 49

TO OUR READERS | 4

FRAUD CONFERENCE

10 QUESTIONS

Tomisin Fashina | 6

Using data analytics to fight fraud | 50

TALKING POINTS

NEXT UP

Facebook hub, digits, Mest incubator, new Interswitch chairman, mobile money run | 9

10 best inventions of 2017 | 52 China plans unmanned police station, Japan fintech visa, workers don't fear robots, in brief | 53

ToLet Jumia acqusition, CBN watchlist framework, SME council, Access Bank growth plan, ICT local content law, Diamond Bank offloads West Africa subsidiaries | 10

NIBSS FRAUD REPORT

Third Quarter 2017 fraud report | 54

ROUNDTABLE

FirstBank 100 million cards, by the numbers, cryptocurrency insurance, data eating apps, new rental platform, Jostkyc for business, open internet agenda | 11

Perspectives on Open APIs and payments | 56

STATE OF PAYMENT

Visa Olympics wearables, Moscow ring tickets | 59

STARTUP NATION

Shola Akinlade, co-founder and CEO of Paystack | 12

TRENDS

IKECHUKWU NNAMANI

Gartner's Top 10 Strategic Technology Trends for 2018 | 24

2017 PERSON OF THE YEAR | 14 THE INTERVIEW | 18

NEFF INSIGHT Secure Internet of Payments things | 46

NIGERIA FINTECH 50

THE RISK REPORT

Phishing outranks hacking, numbers, fileless attacks on the rise, Akita device, SWIFT warning on hackers | 48 Google is tracking you, threat level, quantum encryption , China eIDs in SIMs, Mastercard AR for shopping, MEDALLION

COVER

Most secure choice card, Festy virtual currency wristband, Paypal for Facebook online marketplace, digits, Google sound payment | 60 Oil-backed virtual money coming soon, in brief, Venezuela thinks its own bitcoin, deregulating banking in US, Microsft Pay, Square shop, vibrating payment | 61

LAST WORD

Creating your own hacking hit squad | 59

On the cover Photograph by Studio24 for E-PAYMENT REVIEW

E-PAYMENT REVIEW (ISSN: 2360-9818) is published quarterly by E-Payment Providers Association of Nigeria, 1 Rachael Nwangwu Close, Lekki Phase 1, Lagos. © Vol. 07 No. 04. December 2017. All rights reserved. The opinions expressed do not necessarily reflect E-PPAN’s policy. E-PPAN accepts no responsibility for views expressed by contributors. Printed in Nigeria.

E-PAYMENT REVIEW December 2017

To Our Readers

TWITTER - UBA / GTBANK / FINANCE INDABA

Honouring fintech leaders SELECTING A PERSON OF THE YEAR ISN’T EASY. THIS ANNUAL ritual of singling out an individual from the deep sea of wonderful people doing amazing things in the field of digital payment requires carefully wading through a ton of financial and technological accomplishments. This is our second year of making this decision and we chose Ike Nnamani, the soft spoken chief executive overseeing the work of Medallion Communications as our 2017 honoree. Interviewing him is a delight. He approaches each question with a tranquility that seems to originate from a surprise with the question itself. Listening to him means you are getting educated because his answers are loaded with not just the answer but an analysis of all the issues around telecommunications and banking and payment and everything else. Sometimes questions you wrote down get answered before you ask them, which leaves you scrambling to find meaningful things to ask. I sat with him at his office in Lekki, Lagos on one Sunday evening for his Person of the Year interview. Even on a day biblically reserved for resting, he was still working. Yet, prior to the interview, we spent a good hour reviewing events in Nigeria and his opinions on the issue reveal something about his personality. He cares about everything and has a cultivated idea of what can be done to make things better. He espoused his insight with pauses to answer his calls on a Bluetooth earpiece. Once the interview started, he put all While the fintech calls on hold while he spoke about industry is thriving and adoption rate is growing, his work, his motivations and his many people are still una- plans for Medallion’s future. There is excitement in his voice when he ware of these financial reveals all the incredible benefits that services applications and the country is getting (and will still the various opportunities get) from its citizens’ access to digital that they can bring into communication. their lives. What I found very interesting was his bashfulness when speaking about his selection as the magazine’s Person of the Year. When I asked him to comment on his choice, his words came out in a measured pace of gratitude to God that made it seem like he was having an out of body experience. His interview is inside and it is my hope that in reading it, you will find the same delight I had speaking with him. This Year-End issue of the magazine is a bumper package. We have selected 50 fintech innovators in Nigeria who are leading the power surge in payment. We did that for two reasons. One is to celebrate the various start-ups involved in the process of creating new technologies to disrupt traditional financial markets. The other is to raise awareness. While the fintech industry is thriving and adoption rate is growing, many people are still unaware of these financial services applications and the various opportunities that they can bring into their lives. These fintech companies utilize technology as widely available as payment apps to more complex software applications such as artificial intelligence and big data. You will find one or two who are engaged in stock trading, insurance and other niche services all availed on the mobile phone. The list is in no way exhaustive and it is presented in an intricate design that would allow us to pack so much into 64 pages. We think that something needs to be done to publicize their existence. One way though is for the fintech companies to end their reticence and find a way to reach out to the public with messages about their products and services. And they should do it in a manner that this is clear and concise. For our Startup Nation, we spoke to Shola Akinlade, co-founder and CEO of Paystack. His belief and excitement about the impact his company is having on merchants’ ability to accept digital payment are clearly written on his face. Though he expresses it in few words, but you get the message that Paystack has taken the daunting challenge of trying to bridge the gap that is stopping many businesses from being part of the digital payment race. We hope you enjoy this issue!

Brown N. Ugbaja, EDITOR E-PAYMENT REVIEW December 2017

AWARD SEASON

L-R: Vice chairman of the Forbes Publishing Company, Kip Forbes; UBAChairman, Tony Elumelu and Anne Eisenhower, granddaughter of former US President, Dwight Eisenhower at the conferment of the Dwight Eisenhower Global Award on Elumelu by the Business Council for International Understanding.

Christopher Moore, publisher and CEO of EMEA Finance Magazine (left) and Segun Agbaje, CEO of GTBank receiving awards won by his bank at the EMEA Finance Awards, 2017. GTBank was named Best Bank in Nigeria, and Best Bank for CSR in Africa while Agbaje got the award for the CEO of the Year.

Winners at the 2017 African Fintech Awards held in South Africa in October. The event saw weeks of voting with the public also involved in choosing the winners.

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E-PAYMENT REVIEW December 2017

10 Questions Y E A R-E N D E D I T I O N

Tomisin Fashina Chief Information Officer, Ecobank and

Managing Director, eProcess (an Ecobank subsidiary) lays out his experience with technology and what it holds in store for payment's future FACEBOOK AND GOOGLE? Mobile will definitely continue to be a big driver of payments in the foreseeable future, however IOT, blockchain and cryptocurrencies might become quite evolutionary in how payments are made. The collaboration between fintechs or banks setting up their own fintechs will also be significant as new innovations in technology revolutionize the payments space. Data analytics would play a significant role in driving or supporting the payment space. The role of banking in the supply chain for payment would be redefined and change significantly considering all of these new technologies, especially blockchain and cryptocurrencies, and the coming into the payment space of such companies as Amazon, Google, Apple, Facebook etc. lastly, payments will change from “what we do” to “what happens”! Meaning, it will happen unconsciously.

CAN YOU TELL US ABOUT YOUR EDUCATION AND YOUR PERSONAL AND PROFESSIONAL BACKGROUND? I have a degree in computer engineering obtained from Obafemi Awolowo University (formerly University of Ife) and an MBA in marketing from the University of Lagos. I am also a doctoral scholar in business leadership, at the Capella University, USA. HOW WOULD YOU EXPLAIN YOUR BANK’S DEVELOPMENT AND ITS VISION? Ecobank has a Pan-African vision with a commitment to drive economic transformation across Africa. It has banking affiliates in 34 countries and several other subsidiaries mostly in Africa, but also in major financial districts across the world. It aims to be the number one financial services provider in Africa for Africans by bringing financial solutions to the most remote locations on the continent. WHAT ARE THE MOST IMPORTANT GOALS OF YOUR WORK? As the CIO and MD of eProcess, my responsibilities are to provide required technology services to all of the bank’s subsidiaries and support the business to adequately serve its customers and meet its business objectives. It includes enabling innovative digital solutions that give the business a competitive advantage in the market.

YUMPU

AMONG THE DIGITAL PRODUCTS OR SERVICES CURRENTLY AVAILABLE IN THE MARKET, WHICH DO YOU THINK HAS DONE A REALLY GOOD JOB OF SOLVING A MARKET FRICTION? Mobile penetration (as a digital channel) has transformed banking today and enabled financial institutions to deliver services to varied categories of customers. The combination of mobile, the mobile app and USSD has been transformative. It has removed the constraints of geography which limited traditional banking in the past. This has inadvertently allowed financial services to be delivered to a large population of the unbanked, which the traditional banking model could not do. WHAT IS NEEDED TO MAKE DIGITAL PAYMENT SYSTEMS 6

E-PAYMENT REVIEW December 2017

VALUABLE AND ATTRACTIVE FOR PEOPLE IN RURAL COMMUNITIES? The key constraints for digital payment systems in rural areas are costs, unavailability of internet services and the affordability of smart devices by low income earners. Taking away these constraints would allow the penetration of digital payment systems. In Ecobank, we are working on a digital payment strategy that is very low cost, does not require subscription to internet services and would work on basic mobile devices. WHAT HAS SURPRISED YOU THE MOST IN THE PAYMENT SPACE OVER THE PAST 5-7 YEARS? IS THERE A SIGNIFICANT THING YOU’VE CHANGED YOUR MIND ABOUT SINCE THEN? The speed at which innovation in new technology has changed and continues to change the financial

services and payment space has been revolutionary. The advent of fintechs, the significance of mobile in the payment space, the use of social media in payment transactions, the evolution of IOT, the research on blockchain and cryptocurrencies and so much more all make technology such a disruptive force. It seems at every turn there is something lurking in the corner that would turn everything upside down. These are really exciting times for not just payments but for the entire world. IT’S USUALLY INTERESTING TO HEAR PLAYERS IN THE INDUSTRY MAKE PREDICTIONS ABOUT PAYMENTS. HOW WILL THE WAY WE PAY CHANGE OVER THE NEXT FEW YEARS ESPECIALLY WITH THE EVOLVING STATE OF FINTECH, AS WELL AS THE INVOLVEMENT OF GLOBAL GIANTS SUCH AS AMAZON,

SOME PARTS OF THE WORLD ARE ON THE VERGE OF ADOPTING OPEN BANKING. DO YOU SEE THIS LIKELY TO DRIVE MORE COLLABORATION OR MORE COMPETITION BETWEEN THE BANKS AND FINTECHS? I would say it would drive more collaboration not just with fintechs, but literally with every other player or company interested in revolutionizing services to their customers. I see a time when everything and everyone becomes so interconnected, that technologies that drive open banking would be the norm for every industry. WHAT’S YOUR FAVORITE PIECE OF TECH (DEVICE, APP, LITERALLY ANYTHING) AND HOW HAS IT MADE A DIFFERENCE TO YOUR LIFE? My iPad! I was a reluctant user way back in 2010 but it has taken over everything I do. I practically do everything on my two iPads. From reading the Bible, to making business presentations, taking notes/ thoughts and studying for my doctorate. The iPad is at the centre of my experiences today. WHAT ARE YOUR INTERESTS BEYOND WORK? I am a Christian minister with keen interest in people development. That informed my desire to obtain a doctorate in business leadership.

E-PAYMENT REVIEW December 2017

Talking Points Y E A R-E N D E D I T I O N

Facebook hub

APPOINTMENT

Interswitch names heavy-hitter Ken Olisa chairman

Facebook will open a “comGoogle CEO Sundar munity hub space” in NigePichai takes a selfie in ria next year to encourage Lagos, which he posted software developers and to Twitter. technology entrepreneurs. The centre would host an “incubator programme” to help develop technology start-ups, while it will also train 50,000 Nigerians in digital skills. Facebook said the training – aimed at software developers, entrepreneurs and students – would be offered in cities including Abuja, Port Harcourt, and Kaduna.

INTERSWITCH HAS APPOINTED Kenneth Olisa as its new chairman. He succeeds Adedotun Sulaiman who served in the position for 11 years. As one of the most creative and entrepreneurial leaders in UK banking and IT Olisa will make a big difference to Interswitch. He is a British businessman with a career in technology that commenced at IBM and spans well over 40 years. He founded and led the technology merchant bank Interregnum and is also the founder and chairman of Restoration Partners, an independent boutique technology merchant bank, reputed as architects of the Virtual Technology Cluster model. In 2015, he became the first black Lord-Lieutenant of Greater London having been appointed by Her Majesty the Queen. "As the son of a Nigerian father I am particularly honoured to have been elected to fill the shoes of my distinguished predecessor – Mr Sulaiman – whose steady hand has helped steer Interswitch’s journey so far. They are big shoes to fill,” Olisa said in his acceptance of the appointment. Founded in 2002, Interswitch is active across the entire payments value chain and currently processes over 4 billion unique transactions yearly.

$11.8 million

Amount committed by the European Investment Bank in Partech Africa, a new initiative expected to unlock a total of $118 million of new financing for African entrepreneurs in fintech, consumer online services, mobility, enterprises services, and health-tech.

30%

Percentage of African e-commerce startups that are profitable, as business tackle issues such as lack of funding, shortage of trust and logistical difficulties, according to the Disrupt Africa Afri-Shopping: Exploring the African E-commerce Startup Ecosystem Report 2017.

WIKIPEDIA

MEST incubator Pan-African entrepreneurial training programme, seed fund, and incubator MEST has launched two new Incubator spaces in Lagos, and Cape Town to offer entrepreneurs the same support, skilled staff, mentorship, network and resources enjoyed in Ghana, as well as a number of curated events in an effort to bring together the African tech community - catering to everyone from startup founders and teams, to investors and corporate executives.

FINANCIAL INCLUSION

Mobile payment breaches half trillion threshold

MOBILE MONEY OPERATORS (MMOS) IN THE COUNtry recorded N555.83 billion inter-scheme transactions in the first six months of this year, according to a report by New Telegraph. This is just as the number of MMO agents reached 5,517 in the corresponding period. Industry factsheet from the Nigerian Inter-Bank Settlement System Plc. (NIBSS), showed the number of mobile money users stood at 2.3 million during the period. The report shows that the N555.83 billion was achieved in 24.17 million deals among the 21 MMOs who have been integrated into NIBSS platform for interoperability. Nigeria's mobile money market is estimated to be worth about N1 trillion and with MMOs crossing the middle threshold, analysts believe the industry could grown faster by supporting digital inclusion at the grassroots. The Central Bank of Nigeria licenced mobile money operators in 2011 and six years down the line the service is yet to go mainstream. Onajite Regha, Executive Secretary and CEO of the E-Payment Providers Association of

Nigeria blamed the situation on the failure of operators to collaborate, especially in building an agent network that would serve the entire industry. “One thing we have noticed is most of the licensees have busied themselves building their respective agents in silos, resulting in limited operation and coverage and lack of visibility and resultant lack of scale,” she told New Telegraph. "So, the market is there, but the potential huge market has been eluding most of them.” However, CEO of NIBSS, Adebisi Shonubi, said the problem is that the non-bank MMOs were shifting their focus away from why they were granted licences, which was to serve as transaction channels and agents for deepening financial inclusion in rural areas. Instead they operate in the cities to compete with banks. “I think a lot of the MMOs have some misconceptions about their licences. Some of them believe they got a banking licence. Yes, you get a financial licence but mobile money is not a banking licence," Shonubi said. E-PAYMENT REVIEW December 2017

TALKING POINTS

Y E A R-E N D E D I T I O N

PROPERTY LISTING

ToLet.com.ng snags Jumia House Nigeria PROPERTY CLASSIFIEDS portal, ToLet.com.ng has acquired Jumia House Nigeria for an undisclosed sum. ToLet will merge the two platforms in the coming months, under the new name of PropertyPro. ng, snagging 65% share of Nigeria's online real estate market. ToLet currently has about 60,000 listings on its platform, while Jumia House has around 22,000, the vast majority of which are property listings for sale. Founded by Fikayo Ogundipe, Sulaiman Balogun, Dapo Eludire and Seyi Ayeni, ToLet launched in 2013 as an online estate agency, but pivoted in January 2017 to become a property classifieds platform. In 2016, the company secured Series A funding of $1.2m, from Frontier Digital Ventures, to expand its operations. "Our combined businesses, ToLet.com.ng and Jumia House Nigeria, have the scale and the resources to transform the online property sector for the benefit of property developers, real estate agents and property seekers alike," said Ogundipe.

WHEN AJAY BANGA CAME TO TOWN L - R: Paul Tswanya, Vice President, Government Services & Solutions, Mastercard; Omokehinde Adebanjo (Vice President and Area Business Head, West Africa, Mastercard); Raghu Malhotra (President, Middle East and Africa, Mastercard); Vice President of Nigeria, Prof. Yemi Osinbajo; Ajay Banga, President and CEO, Mastercard and Daniel Monehin (Division President , Sub-Saharan Africa, Mastercard). REGULATION

CBN framework for BVN, watch-list operations

THE CENTRAL BANK OF NIGERIA (CBN) has released a regulatory framework for Bank Verification Number (BVN) operations for for the financial system and watch-lists for the Nigerian banking industry, to address the increasing incidence of fraud. The watch-list is a database of bank customers’ identified by their BVNs, who have been involved in confirmed fraudulent banking transactions. The CBN said that appropriate penalties shall apply to any bank that fails to enlist individuals confirmed to have been involved in fraudulent activity. The guideline lists entities that may have access to BVN information, subject to the approval of the CBN. They include: DMBs, OFIs, mobile money operators, payment service providers, law enforcement agencies, credit bureaus and other entities as applicable.

MASTERCARD / BIZWATCHNIGERIA / WOMENSWORLDBANKING

Facebook launches SME Council in Nigeria

FACEBOOK HAS FORMED A Nigerian Council for small and medium enterprises that specifically brings together its Africa’s SME team and Nigerian business owners from a range of industries into a partnership designed to provide better digital tools for business and customer growth. Council members bring with them a wealth of unique experiences in understanding and embracing digital and mobile strategies, as well as reaching the Nigerian customer, making them ideally positioned to offer support to other companies who need it. 10

E-PAYMENT REVIEW December 2017

Access Bank unveils strategic growth plan

ACCESS BANK HAS LAUNCHED A new five-year strategy that it hopes to use to become the number one retail bank in the country and Africa's gateway to the world by 2022. Hebert Wigwe, the bank’s Group Managing Director, said at the launch in Lagos that the new plan would centre on strategic levers that include digitally-led, retail banking growth, consolidation in wholesale markets and customer centricity. It will also create a ‘Universal Payments Gateway’ to dominate international trade and inter-African payments.

The circular stated further: “A watch-listed individual shall not be allowed to enter into new relationship with any bank; A bank may choose not to continue business relationship with account holder on the watch-list. Where a bank chooses to continue an existing business relationship with holders of account on the watch-list, the account holder shall be prohibited from all e-channels, such as ATM, PoS, internet banking, mobile banking, including issuance of third-party cheques.” “A watch-listed customer shall not provide reference to another customer, neither shall he/she be allowed access to credit facility or guarantee credit facilities," a circular from the banking and payments supervision departmentof the CBN said. “Penalties that applied to watch-listed customers shall apply to all accounts that he or she is a signatory to.”

Nigeria may legislate local content

MINISTER OF COMMUNICATIONS, Adebayo Shittu, has said that the National Assembly may urgently legislate on a policy to end acts of sabotage to local content in ICT. In remarks at the National Information Technology Merit Award in Lagos, he said the ministry, through the National Information Technology Development Agency (NITDA), is ready to boost local content in the information communication technology (ICT) sector in order to make it compete favourably in the global market.

Diamond Bank to sell West Africa operations

DIAMOND BANK HAS AGREED TO sell its operations in Benin, Togo, Cote d’Ivoire and Senegal for €61 million to Manzi Finances S.A., a Cote d’Ivoire-based financial services holding company. “After 18 years of building the Diamond Bank franchise in other markets in West Africa, the time has come to fully apply our resources to Nigeria,” said CEO Uzoma Dozie in a statement. By focusing its resources exclusively on Nigeria, Diamond Bank is poised to capitalize on the positive macro fundamentals inherent in the Nigerian market.

MILESTONE

FirstBank issues 100 million cards FIRSTBANK OF NIGERIA has become the first financial institution in Nigeria and West-Africa to issue 10 million cards to customers across the sub-region. The bank currently processes over 78 per cent of its customer transactions through self-service channels. Adesola Adeduntan, Chief Executive Officer of First Bank, sai delivering this feat was a testament to the bank’s brand promise to put its customers first and continuously improve its business to serve them better. The bank recently implemented new features on FirstMobile, its mobile banking application that include card-in-control functionality which allows customers to determine channels (ATM, POS and Online) and locations, where their cards can be used. The other is the QR payment solution that enables customers to make payments by using their phone cameras to scan QR codes at merchant locations or uploading a QR code on a smart phone via the FirstMobile App.

BY THE NUMBERS

N143 billion

Amount allegedly owed the country in unpaid taxes by 24 companies in the telecom sector, according to the House of Representatives adhoc committee on communication equipment and service companies/ vendors.

25 billion

Number of jobs the African Development Bank plans to create across Africa in the next 10 years with the launch of its Youth Advisory Group.

N5.5 billion

Amount the National Information Technology Development Agency (NITDA), said it saved Nigeria in performing its duty as the clearing house for all IT procurement and services in the public sector.

BITCOIN RISK

Cryptocurrencies lack consumer protections AS BITCOIN MAINTAINS ITS STEADY RISE, THE NIGERIAN DEPOSIT INSURANCE CORPORAtion (NDIC) has cautioned Nigerians that they will not be afforded consumer protections when trading virtual currencies. Speaking at a workshop for finance correspondents on 'financial disruption of digital currency and its consequences on the banking and deposit insurance system,' a team of NDIC officials struck a firm tone, stating that those buying or trading in virtual currencies are doing so at their own risk as "bitcoin is not covered by the CBN rules, and NDIC will not insure it." Mohammed Umar, director of research, policy and international relations at the NDIC and Dr. Sabo Katata, deputy director of the RPIR, all likened cryptocurrency trading to gambling and emphasizied that the regulator does not provide insurance coverage for the risks associated with trading virtual currencies not issued by the central bank.

Datally to curb Alosab brings data eating apps rental platform GOOGLE HAS LAUNCHED a new mobile data-saving app known as `Datally’, that will help users in the emerging market to understand, control and save data. It is supposed to help you understand where your data is going, and cut down on how much you’re using. Datally will show which apps are using data the most and at what times your data is getting used up; it’ll also recommend ways to cut down data usage based on your own activity and suggest nearby Wi-Fi networks for you to connect.

NIGERIAN STARTUP Alosab has launched an on-demand property rental platform where home-seekers can find and secure rental properties. Unveiled in September, Alosab aims to remove the frustrations faced by Nigerians when it comes to renting properties. Users place a request on the platform and matches them with available properties, according to Stephen Oloh, founder and CEO who claims users can secure affordable property within 48 hours on the site. The self-funded startup is on the lookout for investors.

KYC solution for businesses

PAYMENTS COMPANY JostPay has created JostKYC, a screening platform that helps businesses verify the identities of customers via email authentication, bank name, driver’s licence, and live face capture. Launched in 2014, JostPay offers APIs to businesses allowing them to accept payment via a variety of means. Founder and CEO Olubowale Obayomi told Disrupt Africa the familiar processes used over the internet in terms of KYC were flawed and had left room for fraudsters and cybercriminals to flourish.

NET NEUTRALITY

OLX/ GOOGLE, / ALOSAB / INSTANTEXCHANGERS

Nigeria pushes open internet agenda

RECOGNIZING THE BEST IN FINTECH L-R: Social Media Analyst, OLX, Ayomide Eklu; Marketing Manager, Fifemayo Aiyesimoju and PR & Comms Lead, Uche Nwagboso at the Nigeria Technology Awards where OLX, the world’s leading classifieds platform, won the award for Classified Ad Website of the Year for the third time in a row and for the first time the Mobile App of the Year. The annual award recognizes technology entrepreneurs, innovators, inventors, academicians, and policy makers in Nigeria.

THE NIGERIAN COMMUNICATIONS Commission (NCC) is soliciting input from stakeholders to its draft code of practice in support of net neutrality and an open internet in the country. The proposed code seeks to protect the rights and interests of ISPs and consumers, as well as effectively address issues such as discriminatory traffic management practices and online abuse. In July, the Alliance for Affordable Internet (A4AI) in Nigeria and the World Wide Web Foundation made a joint submission to the NCC demanding the internet be kept as a neutral and open space. They asked that discriminatory traffic management be prohibited. "Operators should be subject to strengthened transparency obligations," the submission said. "These pertain in particular to providing more detailed information in custom-

ers' contracts: the possible impact of traffic management techniques used by the ISPs, the concrete impact of the (traffic, speed, etc.) caps or allowances attached to the plan, information on connection speeds, etc," Dr Omobola Johnson, Chairperson of A4AI and former Minister of Communications, has urged more investment in infrastructure for greater connectivity in Nigeria. "The barriers that tend to be most cited in developing economies include funding to build the infrastructure necessary to provide connectivity, and the availability and appropriate pricing of spectrum to support wireless connectivity. I do agree with this assessment, and I think that the public and private sectors in developing economies must come together and collaborate to find win-win solutions that address both the issue of connectivity and the issue of cost," she said. E-PAYMENT REVIEW December 2017

Startup Nation Y E A R-E N D E D I T I O N

PAYSTACK'S BIG PUSH TO REMAKE HOW MERCHANTS GET PAID Paystack's co-founder and CEO, Shola Akinlade, on why his company's payment options can make online business more professional and reliable BY BROWN N. UGBAJA GIVE US A BRIEF INTRODUCTION ABOUT yourself and where you are coming from? I graduated from Babcock University where I studied computer engineering. Before Paystack, I worked with Heineken, a Nigerian Brewery Company, where I wrote software. I did that for about five years and thereafter, I started helping some banks build payment disbursement solutions. I figured I was in a good place to try to solve payment problems and so I decided to set up a payment company.

PAYSTACK

What is the value proposition of Paystack? There are three big things we try to do very well at Paystack. One, is to make sure businesses can start accepting payments in as little time as 30 minutes. Before Paystack, business integration into payment used to take three to four weeks but we figured out how businesses can sign up and accept payments very fast. Two, is provide multiple payment platforms. People can pay via cards, bank accounts directly, USSD etc. We have made it possible so merchants don’t have to worry about how the customer is going to pay. The other thing we did very well was to create a very nice dashboard for reconciliation. You can easily see your data and who your customers are. Ultimately, we are focused on building tools for merchants and we are giving them the right things. Explain to me like I am a ten year old, what you mean by helping merchants to collect payments? Just think about it this way; we are in Ikeja now but it is easier for me to buy something from someone in the USA than someone five miles away. Why? Because these merchants in Ikeja don’t have the tools to accept payments electronically. When they think about it, there is so much for them to do like talk to a bank, work on API, and think about security. What we say at Paystack is that you do not need to think about all those things, we will think about them for you. We make sure that any business, big or small can accept payments from their customers whether they are in front of them or not. Just sign up on Paystack and integrate it to your website. Even without a website, we can give you a link to send to your customers and they will be able to pay you electronically. How much payment experience do you and 12

E-PAYMENT REVIEW December 2017

your co-founder have? I already explained that I wrote software for banks. Ezra [Olubi] worked in a payment company before we started Paystack. Presently, we have twenty-six people on our team and most of us have either been in the payment industry or have worked insoftware development for a long time. If you look at the payment environment, there is so much talk about going electronic, what about it excites you the most? I think two things; firstly, the possibilities of businesses charging people that are not in front of them is amazing. Those are the things that can change the economy because as a business if you are limited to just accepting payments from people that are in front of you, then you can’t scale. If someone can pay you from Victoria Island, Abuja, China or even in the United States, it means your business can scale. Secondly, the fact is that so many interesting things are happening. Internet adoption is getting higher, more people are using smart phones, and more have data plans on their phones. A few years ago, most people didn’t

have data plans on their phones; they were probably just looking for free Wifi everywhere. In fact, there are about six million people joining the internet every year. So, the fact that a business can take advantage of these is very exciting. How do you market Paystack? For us, the good thing is that people are looking to this. We have over four thousand merchants and most of them have heard about us through word of mouth because it works. Once they see that it works, they in turn tell their friends and colleagues about it. We are currently thinking about taking the word out and telling our stories online and going to events. I think the real growth has come from word of mouth, developers using it and having seen that it really works, tell everybody else. How would Paystack and what you are offering, impact the rural areas? When people say cashless or financial inclusion I try to think about it from merchants accepting payments and the use-cases are the things that

will drive it. One of our customers is a power company doing prepaid digital billing and because of them, people who have never used their cards online have done so. Imagine a situation where your electricity goes off at 11pm on a Friday night, you do not have a choice but to buy electricity with your card online otherwise you will stay in darkness. We have merchants like Paylater who give out loans even in the rural areas but before you get the loan, you must add your card details so they can debit you for the loan. You can now see that the more these use-cases come up, they more they use electronic payment. I think if Paystack continues to drive merchant acceptance and make it easy for businesses to accept payments, naturally these businesses will bring their customers with them. I mean, it’s hard to say everyone should go electronic when the things they buy are not even done electronically. I feel this is an important step in the cashless drive. Helping merchants and providing them with the tools to bring their customers into the digital cycle. Paystack will help merchants anywhere and as long as we are helping them, they will bring their customers. Is there a requirement that qualities merchant to be accepted on your platform? For now, we only work with businesses that are registered with CAC and those with corporate accounts. How do you think businesses should re-think the payment experience? I think digital payments offer businesses some advantages over cash. After a while, businesses that collect cash, do not have a sense of who their customers are. They don’t have some of these insights but with digital payments, like what we do at Paystack, a business can just log on and see exactly who their customers are. Who are my top customers? Who is my long serving customer? How long has he been a customer? How much has he spent on my business? Businesses need to realize that data is the new currency and digital payments offer them the opportunity to start getting data that they can use in multiple ways that can help them grow their business. It might not be a direct shift but I feel that there should be a trend that will help us move little by little from cash. The truth is that cash is easier but with digital payments, you can scale your business and have deep insights to how it is doing. What is Paystack’s competitive edge? Firstly, the speed at which you can start using it and secondly the success rate. I always tell people, if your card doesn’t work on Paystack, it is never going to work anywhere else because we have built our infrastructure to work very well, which is something we are very proud of. Then, you have the multiple payment methods like banks accounts, cards etc. it’s easy for customers to pay with Paystack, as the conversion rate is higher and better. Talking about success rate. In July, you said in a press release that you have reached the one billion naira monthly transaction threshold. How were you able to grow transactions on your platform to that amount? It has even grown way beyond that. The truth is that we have been very organic about making sure the platform works. If it works for one person, he

can bring another person. We also make sure that our merchants have a good experience. Some of our merchants are also very popular and word spread around about how they are getting paid online. That’s how we have being doing it. How do you compete with other players? Payment is about collaboration, if you want it to be successful. If a card comes to us, we try to make sure that the transaction is successful and that involves a lot of collaboration at the back-end. I think collaboration is very important in payments that is why you can use a GTBank card on a Diamond Bank ATM. Payments must involve partnership and collaboration, otherwise we cannot have a successful payment system. So no competition? I won’t say there is no competition but I think the real competition is cash. I mean, people still use their cards to collect cash from an ATM machine and then go and pay someone. They don’t trust the digital systems yet. So for me, the real competition is cash. For any business Before Paystack, that is business integration l o o k ing for a into payment used to take three to four weeks f o c u s e d but we figured out how company to help businesses can sign up t h e m and accept payments build the very fast. tools for receiving payment, Paystack is most likely the right option.

There is so much to do but we have the capacity to get it done. The advantage is that with enough capital, startups will be able to focus on building new things. Now for the long term, a lot of young entrepreneurs will be empowered to build solutions that will endure as we are not going to wait for Paypal or any foreign company to solve our problems. We are going to be the ones who will solve them. The other advantage is that it will also encourage more local investors who before now were wary about putting their money in technology and rather preferred maybe real estate. When they see the successes, a lot of local investors are going to be interested and that means more money will be pumped into the system. Regulation is a key issue in payment. How does Paystack specifically address this? The Central Bank of Nigeria has been very pragmatic with the guidelines for payment operators which has helped us to navigate the payment landscape. Payments compared to other industries are easy. With the guidelines, you know what you need to do. The rules are all clear. You recently added a new payment feature to Paystack’s acceptance capabilities. What is the criteria you used for determining these specific schemes should be part of your offering? Our customers tell us what they want. When we first started, the idea was not formed completely but the mission was very simple: let’s make it easy for businesses to get paid. How do you define easy? Customers tell us the problems they have and our work is to figure out how to solve them.

Are there any requirements from merchants to ensure they transact in way that is secure? Merchants don’t need to think about the security details. Our API handles the security side of it.

If you could go back in time, is there something else you could have done differently? To be honest no. I think everything has gone the way I wanted it to go. I think I have been lucky. I went to school, built stuff myself and hustled till we got to Paystack and I’m still hustling, I mean I work eighteen to twenty hours a day to make it all work. So, if there is anything else I could have done, I really don’t know. It all happened step by step. One thing I always have at the back of my mind is that the only way you can grow is to learn the lessons at the right time and I still learn every day.

Enlighten us a little on your technology? Our technology is simple. On the front, we provide a place where we can securely capture card details, encrypt it and then transmit it. At the back end, we are able to connect to multiple processors like Mastercard; connect to a few banks directly and when the transaction comes, Paystack is able to tell who the best person to send it to. If it cannot be processed there, we send it somewhere else. That is the general summary of how it works.

Is there any plan to expand and have more offices in Nigeria? I don’t know about having more offices in Nigeria but rather I like to think of the expansion in terms of supporting more countries. The way the vision has to work involves being able to empower anybody to accept payment from anywhere by removing geographical borders. So expansion for us is moving to other markets and connecting all these markets together.

What is your technology support system like? How much is local and how much is foreign? Everything is built by us locally. There is no foreign technology backer.

What are your views on blockchain technology? Will it impact what you are doing at Paystack? I dont want to speculate. I think blockchain technology is very powerful. I think people are still trying to find the right use-cases for it. I think in the next few months or years the real uses or powerful uses-cases will start to emerge.

What about the security side of payment? We are PCI DSS (Payment Card Industry Data Security Standards). compliant. We have a QSA and we built this infrastructure in a way where everything is standard.

A lot of venture capitalists (VCs) are taking interest in Nigeria's fintech. How will that pan out in the long term? I think it is a win-win for everyone. In the short term, startups like us will be able to get the capacity to solve some problems. It takes a lot of effort and I feel what we are doing is trying to catch up.

What do you do for fun? I really enjoy sleeping (laughs). I never knew it was that interesting. I also enjoy playing soccer. E-PAYMENT REVIEW December 2017

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E-PAYMENT REVIEW December 2017

2017 PERSON OF THE YEAR

IKECHUKWU NNAMANI GIVEN HIS COMPANY'S POTENTIAL TO TRANSFORM THE TELECOM SECTOR AND TECHNOLOGY INDUSTRIES AND ITS WIDER IMPACT ON FINANCIAL SERVICES, MEDALLION COMMUNICATIONS CEO, IKE NNAMANI IS NAMED OUR PERSON OF THE YEAR.

BY BROWN N. UGBAJA

E LIVE IN INTERESTing times, perhaps the most interesting epoch in the history of human civilization. We find ourselves in the midst of a technological phenomenon that is far more transformative than previous technology revolutions because it is thoroughly, radically, and rapidly rewriting all the rules for how the world works. This phenomenon, which we have been calling digital transformation, is the fundamental architectural shift in the way the world works from top-down hierarchies to peer-to-peer networks. Digital transformation has enthroned a radical paradigm – a global ecosystem that stands connected unto itself and forcing computing to morph into a utility. The internet of things – gadgets, smart devices, smart phones, and applications dominate our lives – following us and even tracking our actions as we use them. Humans, corporations, and machines are jostling for each other’s attention and bandwidth. And there is a fine mesh of collaborative content that digitally disrupts its way into our homes and workplaces. At present, that disruption is a dominant technology wave – a wave that is growing stronger by the day as young people driven by their knowledge of codes, internet access and an entrepreneurial streak are seek-

ing ways to overcome challenges that had thwarted their forebears. Ten years ago, we had mobile phones that doubled up as calculators and alarm clocks. Today, mobile devices are being used as cameras, navigation aids, personal computers, music devices, and even televisions! Similarly, the television is now doubling up as a computer, allowing you to browse the internet, and record, store, and playback programmes. With thousands of mobile applications available for download, utility possibilities are endless. It is even possible that if you are reading this online it would be on your mobile phone. The era of utility computing and converged gadgets has arrived. Ensuring that this utility runs perfectly at a steady cadence is what keeps Ikechukwu Nnamani awake at night – how to ensure always-on devices remain always on. This is especially necessary in a time when there is tremendous pressure for consumers to use the latest and greatest technology devices. This pressure extends beyond consumers. Enterprises in the supply chain, logistics companies, manufacturing firms, the government, banks and online retail startups also are under pressure to upgrade to the latest internet technology platforms to support data capture activities. Nnamani is the CEO of Medallion Communications, the premier technology company offering public and private interconnection services through its carrier and data centre neutral exchange points in Lagos. Medallion interconnects dozens of telecommunications carriers, E-PAYMENT REVIEW December 2017

PERSON OF THE YEAR

Medallion today supports the exchange of telecom traffic (voice, data and video) amongst Nigeria’s diverse networks. This service unites all operators in the market including mobile, fixed, value added services, and content providers.

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ISPs, content providers, content delivery networks and all other Internet networks with significant traffic in Nigeria’s communications market. It enhances the affordability and latency of the Internet traffic exchanged between its clients and thus improves the overall quality of the digital traffic in the country. In leading Medallion, Nnamani occupies a prime position within Nigeria’s connected ecosystem. He knows the different things people are plugging into the Internet and understands the impact of the flood of innovations that are changing our daily lives. His company is located at the interstices of the fourth stage of the digital economy. The first stage was the computing era, which kicked off with personal computers; the second was the network era and information exchange; while the third is the connected era, where everyone benefits from anytime, anywhere information access. Medallion's usefulness comes sets up interconnect iouses where a plethora of operators not only have the opportunity to be linked up with multiple counterparts in one location, but equally share infrastructure in a way that helps them reduce overheads and cost overruns. This part of the company’s services is crucial for communicating across networks because it enables subscribers from different operators to communicate with each other and has proven essential for extending the scope and efficiency of telecom networks. Leveraging its technologically advanced and secure interconnect switching centres, Medallion today supports the exchange of telecom traffic (voice, data and video) amongst Nigeria’s diverse networks. This service unites all operators in the market including mobile, fixed, value added services, and content providers. Its infrastructure is robust and protocol independent to enable all classes of operators to interface seamlessly, for both TDM and IP-based telecom operations, as well as with any internet exchange points to ensure that local content providers are adequately catered for. “Effective interconnection arrangements are essential for the development of today’s integrated global telecommunication networks. Interconnection is one of the foundations of viable competition, which in turn is the main driver of growth and innovation in telecommunication markets. Indeed, the availability of price and conditions for interconnection in a given market is a major determinant of the extent to which competition will emerge. This holds true for all service markets, from traditional telephony to mobile and satellite services and even high-capacity Internet protocol (IP) connectivity and multimedia services” the International Telecommunication Union wrote in a position paper in 2006, just one year after Nnamani founded his company. Thanks in large part to Nnamani’s efforts, these services have become successful aspects of the communications ecosystem. Nnamani launched a telecom revolution in 2005, when he started Medallion Communications and propelled the concept of interconnect clearinghouse into the consciousness of Nigerians. The vision behind the company has continually found favour in all quarters of Nigerian telecom and fintech sectors. Medallion currently has 70 telecom operators in Nigeria as its customers including the major GSM, CDMA, fixed line, Internet and value added services providers. It is currently the hosting site for the Nigerian Internet Registration Agency domain servers, the country’s internet exchange point and serves as data centre for tech giants looking to provide local Nigerian content online. “As you know, our switch centres are the most interconnected facilities in the country. All the international fibres, metro fibres, .ng, and a host of other local hosting firms are there. We have most of the fibre optic network terminating in our facilities. The Nigerian Internet Exchange is being hosted in Medallion. We will continue to expand across the country, our goal is not only to ensure that data is being hosted in the country by getting this data closer to the subscribers but also we hope that the data will be cheaper. This is one of the core activities we are involved with this year,” Nnamani said in an interview tech news website, itedgenews.ng in May. The other parts of the core activities include the resolution to increase the speed at which new entrants are brought to

E-PAYMENT REVIEW December 2017

market. For many years, interconnection negatively impacted the speed with which startups launch their businesses. As the Medallion CEO explained, it used to take between one to three years before any form of interconnection could be established for new startups. Today, with an advanced network infrastructure optimized for the stringent demands of an evolving application landscape, the company has accelerated the process and collapsed the timeline to just three weeks. In an interview with me in his office in Lekki, Nnamani traced such drastic changes to a recognition that the nature of network traffic has changed, which in turn demands that the interconnection sector must innovate itself as well as evolve the scope of its platforms for not just applications but for future use cases such as machinelearning, self-driving cars, the internet of things and the growing use of big data. He and his colleagues (that is how he refers to his employees) understand that network connectivity has become mission critical for both businesses and end-users. That is why they frequently optimize their processes and systems to ensure the constancy of connections and access to always on connectivity, so people can advance their understanding of the world. For such efforts, Nnamani is regarded as a powerful technology supremo. His proximity to the 21st century way of doing technology is helping to guide the country's digital future, ahead of what some experts believe will be a fresh and unprecedented surge in innovation. He is an adviser, universally respected, "digitally inclusive” and a passionate advocate for enterprising ideas and progressive policies that would aid the growth of technology in Nigeria and across Africa. If he has anything as rarefied as a philosophy, it is to remain committed to help Nigeria take the best advantage of technology while not leaving anyone behind. He is focused on the importance of IT for driving businesses forward and providing excellent end-user experience. A technologist by training, he has a bachelor's degree in engineering from the University of Nigeria, Nsukka and a master’s in mechanical engineering earned at Tennessee State University in Nashville. His foray into interconnection began when he worked as an optical systems engineer at Atlantabased Luxcore Networks, a 1999 startup that pioneered an integrated switching/transmission approach to the all-optical network that powers service providers with a full suite of traditional and advanced telephony, data, and video capabilities over existing legacy and next-generation systems. At Luxcore, he helped design a semiconductor waveguide optical regenerative device, the world’s first integrated photonic wavelength converter chip and the company’s lambdaxchange, also the world first demonstrated all-optical router. The successful delivery of the later product caused a stir in the industry in 2001 because it made Luxcore the first vendor to provide wavelength conversion, which was one of the 'holy grails' of alloptical networking at that time. The device solved the problem of wavelength blocking in telecommunication networks. The lambdaxchange won the best system award at the 2001 optical fiber conference at Anaheim, California. This photonic switch eliminates the need for intermediate electrical conversions and regeneration within backbone transport networks. It enables network service providers to bring to market time-of-day routing, bandwidth on demand, and wavelength reuse. Its key element is all-optical wavelength conversion, the ability to take light at one frequency and create a new and different frequency carrying the same information to the next point in the network. Nnamani is driven by a deep understanding of the relevant metrics and analytics for telecom networks. He knows how to combine knowledge of the sector with his expertise in operational design, change management and execution. His research at Tennessee State University yielded an expanded accommodation tool employed in the joint strike force project of the United States military. His contributions to the project, which was executed for Boeing Aerospace earned him awards from the aircraft manufacturer. He was also involved in design and successfully testing of a prototype Trident II submarine umbilical retract mechanism used by the US Navy in its strategic ballistic

LIFE.GUARDIAN.NG

missiles defense program. He received a naval plaque for his work on the project. Nearly two decades, after these achievements, he is still driven by a desire to solve problems. Currently, he is consumed by such issues as expanding the company’s footprints across the entire country, tackling the menace of cybersecurity and improving Nigeria's broadband connections. The first issue is receiving serious attention with expansion plans dominating the company’s timetable for 2018. By the first quarter, a new data and interconnect centre will go live in Enugu. Other centres located in the North and other southern states are expected to come on stream later in the year. He is tackling the second issue through the Nigeria Cyber Security Report, published by Kenya based Serianu in collaboration with Demadiur Systems, another company he founded and serves as chairman. The report is an agglomeration of cybersecurity incidents in the country and suggestions for tackling the threats posed by cyber criminals. The 2016 version published this year shows that security breaches and attacks costs individuals and businesses a whopping $550 million last year. Reviewing the report at a recent cybersecurity forum in Lagos, Nnamani, said that more than half, about 56.3 per cent, of Nigerian businesses are vulnerable to cyber-attacks and that to protect them involves fortifying public and private ICT infrastructures, enhancing the security competencies of technology users and ICT security practitioners and developing a vibrant ICT security ecosystem with a focus on people, process and technology infused with a large dose of local content. “Cyber Security is a huge threat to businesses in Nigeria. For us to tame it, we must develop a vibrant ICT security ecosystem and work closely with international counterparts and also

encourage cross border collaboration with Africans and global partners,” he said. On broadband, Nnamani joined more than 150 tech leaders last month to compare approaches to expanding access to, and use of, high-speed Internet. The Telecoms Executive and Regulatory Forum 2017 organised by the Association of Telecom Companies of Nigeria (ATCON) in Lagos, highlighted the many ways broadband could create new opportunities for rural communities. Attendees agreed that Nigeria could see billions in economic benefits if broadband access and use improved. To bridge the country’s broadband infrastructure gap and achieve penetration targets, there was agreement that with the right subsidy structures and incentives, private enterprises can deliver the infrastructure more efficiently. As a leader in broadband work, Nnamani was central to the forum’s sharing and learning. His position was that reliable, high-speed access is a necessity, not only for the tech industry, but also for our health care systems, educational institutions, and millions of other businesses. He projected a 50 percent penetration by the end of 2018 if broadband financing challenges could be resolved. Taken together, these efforts portray Nnamani as an individual who places greater importance on digital technologies across the board and who comprehends its impact not just as a tool for improving existing businesses and social activities but as something much more profound. He has proven himself as both a catalyst and a linchpin for Nigeria’s effort at redefining the market and finding new ways to improve economic outcomes. We recognize his leadership in driving forward digital transformation in the country and this is why he is E-Payment Review’s Person of the Year.

Nnamani is regarded as a powerful technology supremo. His proximity to the 21st century way of doing technology is helping to guide the country's digital future, ahead of what some experts believe will be a fresh and unprecedented surge in innovation.

E-PAYMENT REVIEW December 2017

T H E INTERVIEW

PERSON OF THE YEAR

IKECHUKWU NNAMANI WE STILL NEED MORE PLAYERS AND MORE PEOPLE THAT UNDERSTAND THE VISION AND WHAT IT WOULD TAKE TO GET OUR TECHNOLOGY TO FIRST WORLD LEVELS

STUDIO 24

BY BROWN N. UGBAJA

FIRSTLY, CAN YOU START OFF BY TELLING us a little about you, your career path thus far, the highlights, your objectives moving forward, and so on? When did you fall in love with technology? I studied mechanical engineering at the University of Nigeria, Nsukka and after my national youth service, I worked for oil company for a few years and then moved to the United States to study for a masters in engineering under a graduate scholarship programme, which meant I had to do research work for the school. I worked on an innovative research that benefited both the aerospace sector as well as the U.S. Navy. Those were the foundation blocks that enabled me to work in the US and ultimately I developed a passion for telecoms. I worked with a company in Atlanta Georgia that built optical routers for long distance transmission. After working there for some years, I returned to Nigeria to setup a carrier neutral infrastructure company because in 2001 after the major deregulation and licensing of the mobile telephony companies, I saw the need for interconnectivity. We had multiple players but interconnection was a major stumbling block towards the development of deregulated telecom markets. There was also a need for stuff like carrier frontiers and data centers where operators can seamlessly, irrespective of the services they offer, meet at a pairing point. That led to the establishment of the first interconnect data centre facility in Lagos in 2004. Since then we have continued to grow the client base and offer a variety of services. In 2008, we also established a point of presence in Abuja and currently we are working on establishing other points in every geopolitical zone in the 18

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country. Think back to when you were a first-time founder. When you envisioned life as a startup founder – what was reality and what was different than you imagined? When we started, I was a little naïve because I felt that if there was a problem and I got a solution, people would jump at it. Nigeria was facing a lot of challenges in terms of connectivity. The telecom summit of 2001 had asked for the creation of interconnect houses as a solution to the major challenges the industry was facing, so I felt that by helping to solve that problem the industry was going to jump at it. What I did not envision was that the dominant players wanted the status quo to remain because they felt that if you create a level playing field, it will empower the smaller operators to also play. The direct result of what you are seeing today, where you have so many licenses that have been issued by the regulators but very few are operational is because the dominant players have found ways to push others out of the market and have gradually stifled the growth of the market to their own benefit. I did not see that then because I felt the solutions we were providing were going to be endorsed by everybody because we thought we were solving a problem that they were dealing with. But we never anticipated that the desire for dominance and competition was stronger than the desire for them jointly grow. They put up a lot of bottlenecks which till today are still affecting telecom services in the country. That’s why quality of services is still poor and the class of licensees is just limited to a few people who offer every type

of service and making it very difficult for more players to come in. Could you tell me a little bit about the size of your company? what How many people do you have on your management team? We offer interconnect, collocation and data centre services, but we have sub-services that are running within each of them. From the broad point of view as an interconnect clearinghouse we provide seamless service amongst licensed operators. That is why Medallion has been branded the telehouse of Nigeria. Our facilities are where

all critical service providers have their pairing points. We have five business units within the company and a management staff handling each of them from finance, business development, engineering, administration to of course legal and regulatory. We have about 27 people and 90% of our staffs are engineers. Is Nigeria the only place you have your operations? Yes, but we offer consulting and advisory services to major African countries. Most recently, we worked with regulators in Ghana to create the

"MEDALLION HAS BEEN BRANDED THE TELEHOUSE OF NIGERIA. OUR FACILITIES ARE WHERE ALL CRITICAL SERVICE PROVIDERS HAVE THEIR PAIRING POINTS."

irinterconnect licenses and most of the work was done by us under a consulting arrangement. We are doing the same with several other African countries including establishing partnership with some of the companies in these place. But as a business, Medallion is mainly a Nigerian company. Medallion has been growing significantly in different segments of the communications technology market for a number of years now. What has been the companyâ&#x20AC;&#x2122;s journey to date and its major milestones? E-PAYMENT REVIEW December 2017

STUDIO 24

PERSON OF THE YEAR

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I think because we are a carrier’s carrier, in other words we only deal with service providers and don’t interface with subscribers, we don’t have a lot of visibility out there on the street. In the way that they know so much about their service providers, same cannot be said about their knowledge of what we do. But the services and benefits that subscribers get from their service providers are mostly possible because of us. For instance, I can tell you without equivocation that the cost of bandwidth would still be very expensive compared to what it is today if we had not created our facility. Because we have the five major submarine cables distributed there, telecom and hosting services could easily pick and choose which one to work with and cross connect with them within our facility. What we noticed is that once that started happening the cost of bandwidth started dropping because we enabled competition within that space. Companies can easily interface with any of the ISP’s or operators whose services they need because we created that impact and the country is benefiting from it. Today, we see a lot of contents been developed locally in the country and being distributed. Our company is a major distribution point for those contents and value added services. They would have been much more difficult to implement and efficiently handled without us sitting where we are in the ecosystem. We have also enabled, to a large extent, mobile money and other types of digital payment. I remember very well when theCentral Bank issued a proof of concept license to a number of the mobile money operators, they had to come to us to interface with the telcos because without us most of them would not have been able to move from pre-license into full license. They needed to do proof of concept and they used our facility for most of that and a number of them are still actively using today. We enabled them to get the full CBN license because they had to rely on us for connectivity to the telcos and also for power cooling and hosting of their servers. We’ve also impacted the ability of people to make calls seamlessly. Presently, it takes less than a week for a new service provider licensed by the NCC [Nigerian Communications Commission] who comes to us to be interconnected with every other operator in the industry. Before we came, it used to take 20

E-PAYMENT REVIEW December 2017

several years because the operators you want to interconnect with don’t want you in the market to begin with so they would do anything to frustrate you. We’ve drastically reduced the timeline of interconnectivity from several years when we started to a few weeks. I know for sure that a lot of operators existing today would have found it very difficult to take off if they did not interconnect with us. Of course, the Nigerian Internet Exchange is there. We played a major role in its establishment and sustained it for a number of years when they were still trying to get going.

There is no back end of the ecosystem that we’re not involved in including the banks and other financial institutions. Most of the ATM’s are running smoothly but what people don’t know is that our facility and some of the operators in our facility are the ones that enabled some of this things to happen. The operators they see in the frontend are depending on us at the backend to be cost-effective and efficient in their service

delivery. What of foreign operators? A lot of international service providers are coming into the country and they are putting their servers within our facility. The reason they are here is that they want to get content closer to the end-users. When Nigerians go outside the country to access services from Google, Yahoo, Facebook and the rest of them, it drives up the cost of bandwidth and the user experience is not usually good. When you try to access a video it would be buffering and you won’t enjoy it. All that is changing. A lot of them have localized their contents and we are hosting a substantial part of that content in our facility and people are seeing the benefits. It makes it cheaper for these operators because now they are not spending money on unnecessary international bandwidth, everything they need is localized. Subscribers within Lagos are the main beneficiaries of this. That is why part of our plan for next year is to extend the same services we have in Lagos and Abuja to most cities in the country so that subscribers in those places can also enjoy. Whether it is YouTube or any of these wonderful apps that people use, they are now being run locally and a lot of the advert revenue are going to the local economy. What do you think the perception of the technology industry is to people outside of the industry? In other words, how do you expect digital technologies to benefit average people? It is already helping and I’ll give you an example. Before mobile service in particular became prevalent in the country, someone can leave his village, come to Lagos to meet his uncle only to get to his house and find out that the uncle travelled three days ago even before he left the village. He wouldn't know when he’s coming back because he wouldn't be able to reach him and he may not be able go back so he finds himself in a dilemma. That was the life people were living in Nigeria then. But today you don’t have to make that unnecessary journey because by talking on the phone you’ll know if the person is there or not and you’ll also know if the person has the resources to assist you with what you want and should he be able to assist you, you don’t have to go to him to get it. He

can just do a transfer to you from his sitting room. These are all benefits of technology. Imagine how many people fell victim to armed robbery or road accidents making a trip that was unnecessary. Mobile communication has taken care of that. Many people don’t keep money in their houses anymore. You can readily have access to your money when you need it with your bank card so that has eliminated the need to store money in houses and to a large extent it has also affected the perception of armed robbery taking place which sometimes results in harm to people. The other part is e-commerce. Today many people don’t bother going to the market or roam round the street looking for a particular thing to buy because right there on your laptop you can shop on the various e-commerce platforms available to Nigerians, buy what you want and it would be delivered to your home. All these would not have been possible without the telecom infrastructure that has been implemented over the past years of which we are a major participant making sure that they happen. A lot still needs to be done but at least where we are today is more favorable compared to where the country was 18 years ago and it’s something to be definitely appreciated. What role is Medallion playing in the current financial technology revolution? We are an enabler of financial technology services and this happens in three core areas. Firstly, a lot of those offering these services come to us at the early stage when they do not understand the interface between the financial technology side and the telecom side. We have worked with many of them to develop how best this interface would work using our experience with other people and our knowledge in the area. Secondly, We’ve also enabled them to use our transmission links and our connectivity to do proof of concepts of what they intend to offer. Before any fintech gets final regulatory approval, they always insist on a proof of concept that is satisfactory to the banking regulator or the telecom regulator. What we’ve done that has helped a lot is providing the platform and the access for which lots of these new innovation is tested out before they hit the market. As I’ve said before, a lot of the servers and solution providers that are ultimately licensed use our facility especially anyone that has to do with interconnection or interface with the telcos. Almost all of them come to work with us one way or the other during the time they are testing out their service. Thirdly is post approval and the day-to-day running and support of those services. A lot of them have continued to depend on us at the deployment and implementation phase and for post-implementation support. What most of them have is just the idea and the software they’ve developed for mobile money but the software and the server it is running on somehow needed to be interconnected or interfaced with the telcos and they didn’t have that. So we had to bridge that gap for them because our network is protocol independent; irrespective of what they have at their server end we can interface them with the big telecom networks in a seamless way. A lot of the payment switches have connectivity at our facility with the telcos for a number of the payment services they offer. Big data is all the rage now may be because it has created a “Cambrian Explosion” of capa-

bilities and uses. As a data person, let me point out that I ask this in consideration with our environment and circumstances, should we be more concerned with big data or smart data? We should be concerned with both because they are linked together. Smart data should be the starting point because we don’t want to have data that is useless or irrelevant and not practical to our situation as a country and what we need now. Some of the strength we have and what we’ve done very well is to focus on what’s relevant and purpose-fit for our country. Data is relevant to every situation and everything we do. As we build educational related services a lot of data will be developed; as you go into financial services and e-government you find that paper work will no longer be needed because the electronic version will be what will yield big data. That is where analytics comes in. You want to be able to analyze data intelligently. You need to be sure that the data you have generated is properly stored and that is why you need the data centres and servers that will warehouse and store it, and also make it is available when it is needed. That is

"OUR PLAN FOR NEXT YEAR IS TO EXTEND THE SAME SERVICES WE HAVE IN LAGOS AND ABUJA TO MOST CITIES IN THE COUNTRY SO THAT SUBSCRIBERS IN THOSE PLACES CAN ALSO ENJOY."

where you need the connectivity. But it is not the size of the data that is important rather it is the relevance and that is where smart data comes in. When you are talking to a particular population segment you want to be sure that you are giving them relevant information. Of course it has to be available that’s why I said that they are both needed. You must have a body of content but making sure that only the relevant one is picked at the right time is where the smartness becomes important if not you’re going to have a whole lot of data which is useless to any particular set of people and is just stored up there. As we emphasize the smartness of data we also can’t rule out the fact that it is going to become very large and we need the infrastructure to process this large data in a cost effective, timely and relevant way. But the biggest problem we are facing today is where those data are located. We are beginning to see a lot of local data being developed but most of them are stored outside the country which means Nigeria is not getting the benefits of those data. Your content must be developed, stored and used locally to get the full benefit of it. If your content is developed locally but stored abroad, you have to pay some other person to access your own data and the local people will have to depend on foreign contents. If is stored locally and if it happens that foreigners want to access it

means they have to pay us to use it. In this hyper-connected world, where consumers have a multitude of interactions with brands, it’s increasingly important to be able to connect brand interactions and deliver a frictionless customer experience across channels, devices and formats. How do you work with your clients to support this? For us it has to do with availability; we ensure that their content is available 24 hours a day, 7 days a week and all year round. Our service level agreement calls for almost seamless and 24-hour availability. People now need their information to be available to them when they need it and not when you want them to have it. That calls for 24-hour availability and that is what we offer. We make every part of it available for use by our clients. Operators and their suppliers and partners now talk in terms of subscriber or customerled experiences - giving users the ability to control their own experiences, profiles and online identities. Do you think the tools are in place to genuinely support this model? Yes, we do. My only concern is that the data for those experiences is hosted abroad. Though I understand the reason for that is because of cost. Truth be told, it is still cheaper to host abroad than locally and that is because the cost of operation is almost a fraction of what it costs to operate here. What needs to happen is that the government has to redirect some of the resources going into things that are not yielding any result to some of these areas to bridge that gap. Government needs to subsidize for a period of time the cost of local hosting and once that is done, all the servers and contents will be brought back and over a period of time we will gain enough subscriber base so that offering the services at a lower cost will be sustainable. In less than five years it will be cheaper to host locally than to host abroad. Another limiting factor is the exchange rate. The infrastructure that hosting companies need can only be purchased from abroad and that means you have to pay in dollars. I feel that is the government provides that bridge, it will become cheaper to host locally irrespective of the exchange rate. These are some of the governments intervention that are needed to create a transition phase for this to happen. The belief that we don’t have reliable companies that can host locally is not true. At Medallion we have proven that we can do this seamlessly over a number of years. The infrastructure is available but what is missing is the patronage and the fact that people don’t know that it takes a number of years for the client base to build enough for you to be able to offer it at the same price point for some of them to benefit. The truth is you can’t host your infrastructure outside an expect to give your users the ability to control their own experiences. What is the impact of free cloud services to what you are saying about access to data being stored locally? There is no free lunch so anyone telling you that there are free services is being economical with the truth. Somebody somewhere is paying for it. Cloud is wonderful, it is a shared service so ultimately it’s cheaper for everybody. But the E-PAYMENT REVIEW December 2017

PERSON OF THE YEAR

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ones we see as free are not free because somebody somewhere is paying for it indirectly and in return the person always requests for something like your information so that he can sell you adverts. The only exception is when the government uses the national wealth to offer it for free. Having said that, the question should be where is my cloud? Cloud is not only when it’s sitting in Europe or North America. We have been pushing cloud services offered in Nigeria. We have people within Medallion offering cloud services with servers hosted in Nigeria. The cloud and content are in Nigeria. The problem is that these services cannot be offered efficiently within Nigeria unless many people sign up for them. That is why we are pushing towards having infrastructure in as many states as possible because then you can now offer localized cloud based services. The general concept when you talk about cloud we look at Europe, North America, Asia but that is wrong. Cloud simple means that the infrastructure or content is not located in your laptop or your server but that does not mean it cannot be located within Nigeria. I sit on the board of NIRA, the managers of the .ng domain and we want everybody to use the .ng domain and not just using it but also ensuring that the hosting company have their servers within Nigeria. We’ve been pushing the Nigerian internet exchange for many years and the purpose of that is to localize our internet connectivity so that all these things are located within Nigeria and if that is done you’ll see that an operator can to offer you cloud service with the server, content and solution they are offering in Nigeria. Medallion has become a very dominant and very influential part of the communications technology industry. What are the most interesting trends you see in the market today and how do you align your business with them? One of the biggest, which we just discussed is cloud computing and that to me has a lot of benefits because you can have access to your information pretty much at any point you need it as long as you have connectivity to the server where that information is stored. We’ve seen also a lot of convergence between telecommunication and finance with a lot of products and solutions coming out that are making it a lot easier to handle financial transactions using telecom facilities. Of course we are helping to promote that. We are seeing a lot of content development to the extent that it is attracting the attention of big players like Facebook, which recently announced that it is setting up a communication hub within the country to train people on content development and e-business. There is a lot of initiatives in the educational sector, especially in the area of research. A lot of work is going on there and we are actively involved in it to ensure that the Nigerian research network is active and operational. We’ve been hosting them in our facilities in Lagos and Abuja and we are trying to extend them across the country to ensure that a lot of research work and collaboration can happen. Gone are the days when people go abroad to acquire education now; we ensure that world class education is brought to our locality through communication and connectivity, which we are actively and seriously involved in. Another major initiative is in health. Many beautiful products are coming up in the health sector and we are 22

E-PAYMENT REVIEW December 2017

involved in their incubation stage in our role at the backend. We are going to see a lot of that next year. In the area of new payments solutions, a number of people are trying out new stuff that will make getting financial services to the unbanked and making sure that people with minimal education can safely participate in financial services. I can’t name the solutions because we are involved at the conceptual stage so we are obliged to maintain confidentiality about some of these developments. We are going to see very easy and simple payment solutions that are geared towards the less educated and unbanked, at least I can name nothing less than four that I know are at the development stage and have delivery timeline of either the first and second quarter of next year. If all goes well, the country is going to see so much impact on that and all these will be enabled and supported by very strong telecom facilities that we are putting together. What we do is when a solution needs to be brought out, we bring the relevant people in a room and everyone starts working together. That has been our biggest contribution to the system and to the country at large. I don’t think any company has done that better than us that is why today if you check our client base we have over eighty-three major operators and service providers working together and collaborating because we try to take away the anti-competitive nature of people when it comes to ICT. We believe that we are better off if we work together. Some people believe that working together will negatively impact their dominant position but we don’t share that vision. We believe that the market is too big and we’ve not started tapping into the potential that is sitting on it. Most of what happens in Nigeria’s ICT space today is only happening in Lagos and it shouldn’t be so. We believe that the same facilities and infrastructures available in Lagos should be in other parts of the country. If that is done, we would see massive developments beyond what we see today and the economy of the country will grow much faster. As funny as it sounds, I actually wish that Nigeria will have ten Medallion equivalent because the market is too big. When I see people trying to make things difficult for us I just wonder because we are not even where we ought to be. We still need more players and more people that understand the vision and what it would take to get our technology to the first world levels. You are also the chairman of Demadieur. Tell me little about the company? Demadieur has being existing even before

"WE BELIEVE THAT WE ARE BETTER OFF IF WE WORK TOGETHER. SOME PEOPLE BELIEVE THAT WORKING TOGETHER WILL NEGATIVELY IMPACT THEIR DOMINANT POSITION BUT WE DON’T SHARE THAT VISION."

Medallion. It was the original company under which we got our operating license from the regulator but by the time I got my partners in we had to set up Medallion and started operating with the name. Demadieur is more of a system integrated company and one of the core services we offer is cyber security. We publish in partnership with some other organizations the annual cyber security report which covers Nigeria and five other African countries now and is expanding into additional economies. The report is offered for free reason being that I feel knowledge is one of the biggest challenge we are facing with cyber security and electronic fraud. Plus, I look at that as my contribution towards creating awareness about cybersecurity. Every year, we conduct research to find out what is happening and the challenges the industry is facing in the area of electronic fraud and then we put it in a report to let people know what needs to be done, how they can protect their infrastructure and all that. That is one of the services that we are offering. All around the world, cybersecurity incidents are on the rise. Cyberattacks are getting more sophisticated and complex, with hackers constantly innovating and discovering new vulnerabilities through which to exploit systems. Despite spending billions of dollars on cybersecurity, enterprises have been unable to lock down their infrastructure completely or ensure complete defense against cyberattacks. What are the challenges in current cybersecurity measures and how is Demadieur helping the industry to overcome them? One of the highlights of the 2016 report which we found across the five African countries is what I would call ignorance of the populace in what the criminals are interested in. There are three layers of cyber security that one needs to be aware of. One is infrastructure, which unfortunately is where all efforts appears to be concentrated in to find how to secure it. Companies buy big firewalls and all the equipment and that is good and necessary. But it has been found recently that even the most secure infrastructure gets breached every once in a while. What we need to have in place is a very functional monitoring system so that should your network be breached you’re able to detect it in real time and minimize your loss. What we’ve found is that people put up monitoring devices but they are not being monitored until after cyber criminals have had a field day then they wake up and realize they were breached six months previously and they didn’t even know. The cost has piled up. Real time detection and mitigation are the core requirements and functionality that we are trying to create awareness about to make sure people don’t just have the infrastructure but that it is monitored in real time with solutions to address a breach if you notice one. The other important one which we discovered is lack of training. So you’ve secured your facility but your staff and customers have cyber habits that put them at risk. Many people fall prey to cyber criminals because of ignorance. Organizations allow their staff to bring in their own devices without policies that guide how the devices will be used in accessing company systems and information. The same smartphone that a worker uses to access all kinds of sites is also the same one that his company’s email is domiciled in. Anyone can

go through any of those social media channels and have access to your phone from there get access to information that they shouldn’t have. From our findings, only fewer than 10% of companies that allow bring your own device have a policy that the staff is aware of and in some cases it is just there for convenience. In some cases, there is no guideline on how you should secure the data that is being exchanged through that medium. We want to highlight this and explain to people what safe practices that they need to adopt. Another one we need to look at is insider related crime. You may have secured your external access and indicated to your staff the right policies against an external person coming through the e-mail into the system but what happens if you have a disgruntled staff that decides to abuse the privilege they have in the company? How do you mitigate against that? That is where the concept of managed services becomes important. Companies need to have contracts with cyber security firms that offer managed services to be an external eye in case the threat is coming from within and a lot of people don’t understand it. These are the things we try to point out in the report and make sure that people are well aware of what they need to do to secure themselves. What should society be doing to prepare for an increasingly digital world? We should embrace technology and take advantage of all the opportunities it provides. It has become important and necessary and we shouldn’t be afraid of it. We shouldn’t for whatever perceived limitation we currently have as a country not embrace the future because it is here to stay and we can’t hide away from it. We should educate our people and we should have the right resources to be able to handle the negative effects of digitalization and ICT in general. We need to be prepared by investing in both human and technology resources. By providing appropriate data, we can get the government to enact the right laws and make sure those laws are enforced especially in our efforts to tackle cybercrimes. If we give people the right tools and empowerment, if a cybercrime occurs they would not run away from what traditionally should be a good thing just because they are afraid of the consequences. I had an experience with one of the telcos recently. I started getting SMS from them saying that my subscription request to a particular value added service has been approved and fifty naira has been deducted from my airtime. I thought it was a joke and before I knew it I got about four messages subscribing me to four different services and they were deducting my money. I had to go to the operator and I said not only do I want this to stop but I also want a refund because I never subscribed to those services. Now the problem is how many people consider it important to take action when such a thing happens. It happens often and it’s not something to be taken lightly. The solution is not to shut down VAS services but rather to do the right thing. Ignoring it or taking the easy way out will not solve the problem. Just with the mobile phone, technology has been built into the way we live. So we need the government to ensure that those providing these services do not take advantage of the users. This is very important especially as we are pushing for cashless and electronic payment. We should use penalties as discouraging factors; not just in

"PEOPLE NOW NEED THEIR INFORMATION TO BE AVAILABLE TO THEM WHEN THEY NEED IT AND NOT WHEN YOU WANT THEM TO HAVE IT. THAT CALLS FOR 24-HOUR AVAILABILITY AND THAT IS WHAT WE OFFER, WE MAKE EVERY PART OF IT AVAILABLE FOR USE BY OUR CLIENTS." terms of fines but in ways that the users can get redress when they feel they have been cheated. It could be forcing the company to refund an amount higher than they took from users. That way they will not see any value in abusing the system. Those are the things we need to continuously engage both the regulators as well as the general public to do. People need to know their rights and most importantly people should not be afraid of technology. There is a belief in the banking industry that blockchain is a solution to making faster and securer payments. Considering all the issues around blockchain, what questions might banking executives ask themselves when considering whether or not to adopt blockchain technology as an ideal replacement? Do we need blockchain? That should be the question they ask themselves. Just because somebody has used a particular application and it has worked in a certain way doesn’t mean you have to use it for your application. When we built our facilities and infrastructure, we localized to what is applicable in Nigeria. We have the functional requirements that should meet global standards but we localized our facility to what is applicable to us. In doing that as a bank for instance you have to think of three things: one, ease of doing business and ease of use. Would blockchain enhance any of their products? Remember blockchain is like a foundation you build on, so on its own it is really nothing until you create something out of it. There are several applications the different industries - airlines, financial services, health, etc - can apply it to. But they already have several technologies that have been built around their activities. The starting point should be having a particular product, either a new one or an existing one, that enables us to know if this technology will do better in terms of our costumer and if the answer is yes then we ask is this safe and secure? If it is secure enough and serves good purpose, then the third question for would be: is the technology matured enough for you to introduce it or not and at what cost? Once all these questions are answered and it’s all in the affirmative then by all means deploy it. I have said we should not be afraid of technology, use it. The foundation of how blockchain is built is on a case-by-case basis, it’s not one cap fits all. It’s one of those technologies that depends on what you want to do with it or how you develop it or come

up with your application. So the direct answer to that is yes. There’s been a lot of potential benefits like the ability to confirm some payment instruments. In the conservation field they are using it to track endangered species. They get some species, tag them no matter where they go in the world, it is still the same identity that has being tagged on them and the people tracking them can continue to build information about the species using blockchain. Those are some of the use cases we’ve seen in terms of the application. What a bank decides to create it for should be left to the bank but subjected in my opinion to these three criteria and if the questions all check out it is something to be welcomed as long as you have people to create the right solution for you. I think it’s one of those things that have come to stay but we don’t know how long it would last. How do you unwind? I am mostly an introvert; you can hardly see me outside partying or just riding around having a good time. I don’t drink or smoke so you can hardly see me at a bar or club except I’m going there for a meeting. But I’ve never seen that as a disadvantage or feel like I’m missing out on life. For good or for bad I spend a lot of my time working. I don’t know if that is a good thing but because I spend a substantial part of my day working, the free time I get are just for sleep or rest. My social life comes slightly after that but I am contented. I enjoy spending time with my family. I have a well-equipped gym at home and I use it to work out and keep fit. I like to watch football but not play it and I have a five year old daughter who keeps me busy when I’m with her and my son and wife too. We are a very cool family and that’s it. God has been good and faithful and I’m grateful for all that we’ve been able to achieve irrespective of the challenges we face. I have the belief that everything will turn out good and that belief is what keeps me going. You are E-Payment Review’s 2017 Person of the Year. What is your reaction to that? I just want to thank the people that came up with the decision. People who know me well know that I’m a very private person; that I prefer to work in the background. We’ve gotten a lot of awards for the work we’ve done but each time we win, I see it as just a reminder that people are watching and that we have to do better. It is not just so that you win every year but to sustain that belief that made them give you they award. We always look at awards as a call for more work because it means if people have to recognize your work in the future, then you need to do better than you’ve done in the past. We are very grateful that our effort is being recognized. I’m saying we and not I because whatever the company gets it is because of the work my team members are doing. I’m the leader but I can assure you that without the kind of people I have around me none of this would be possible. I will always by default give this to my people and the people working with us. We feel everybody is a team member and part of what we are trying to do and that for us is very important. So thank you for this recognition. Person of the year for a magazine such as yours is a huge honour. My gratitude goes to E-Payment Review for the honour. This will spur us to achieve our objective in the coming years, the industry will be better off for it. E-PAYMENT REVIEW December 2017

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Intelligence, digital, and mesh Gartner's Top 10 Strategic Technology Trends for 2018

AI Foundation Creating systems that learn, adapt and potentially act autonomously will be a major battleground for technology vendors through at least 2020. The ability to use AI to enhance decision making, reinvent business models and ecosystems, and remake the customer experience will drive the payoff for digital initiatives through 2025. Gartner estimating that by 2020, 30% of CIOs will include AI in their top 5 investment priorities, now is the time to invest in data preparation, integration, algorithm and training methodology selection, and model creation.

Intelligent Apps and Analytics AI has become a major battleground for software and service vendors, with AI expected to be incorporated into every application, app and service, at least on some level. Gartner highlights augmented analytics, which uses machine learning to automate data preparation, insight discovery and insight sharing as an area of growing strategic importance. Organizations should

explore intelligent apps that augment human activity, and identify use cases across advanced analytics, intelligent processes and new user experiences

Intelligent Things As the IoT grows to encompass an increasing number of things, AI and machine will enable these things to operate autonomously or semi-autonomously. For example, a robotic vacuum with computer vision could navigate and clean a house with minimal intervention. As the technology advances, swarms of intelligent things will work collaboratively to achieve a goal.

Digital Twin Digital twins, which are digital representations of real-world systems, offer information on the status of their real-world counterpart. These representations can respond to changes or improve operations, potentially saving companies billions of dollars in maintenance repair and operations. While most examples of digital twins today exist within the IoT space, there are a growing potential for digital twins to exist for objects that are not actually “thinks,” such as a digital twin for a human that offers biometrics and medical data to doctors, or a digital twin for a city, that could offer information to city planners about operations and maintenance.

Edge computing Edge computing moves computation and processing closer to the user/thing, or the “edge” of the network. When compared to traditional cloud computing, this reduces the communication bandwidth needed and eliminates the latency between sensors and the cloud. As autonomous vehicles, drones, and

No CEO needed

Blockchain platforms will let ‘the crowd’ run startups

LINKEDIN / 7WDATA

A GROUP OF STARTUPS IS BUILDING AN infrastructure based on blockchain that aims to revamp the way organizations and companies work and collaborate, promising to make their management more open, fair and efficient. In today’s centralized organizations, it is difficult and expensive to get large groups of people to work well together to complete a task. What these startups want to do is to build - decentralized autonomous organizations (DAOs), which means essentially bring the organization and human capital together onto a decentralized and transparent platform, and add a monetary system that rewards workers based on their contributions to the success of the 24

E-PAYMENT REVIEW December 2017

other robotic technologies continue to mature, the need to real-time processing of vast amounts of information will only grow.

Conversational Platforms Conversational platforms are changing how people interact with the digital world. Rather than having to learn how the computer communicates (aka learn the interface), conversational platforms enable the user to convey their intent using natural language. Over the next few years, conversational interfaces will become a primary design goal for user interaction, and may become the primary way that users communicate with the online world.

Immersive Experiences Virtual reality (VR), which places the user in a digitally rendered environment and augmented reality (AR) which overlays digital information on the real world, are dissolving the boundaries between the digital and physical world. Now, mixed reality (MR), which merges and extends both AR and VR, is becoming the experience of choice. Combined with conversational platforms and the IoT, these technologies will usher in a fundamental shift to invisible, immersive, ubiquitous computing

Blockchain The blockchain is a shared, distributed decentralized and tokenized ledger that removes business friction by being independent of individual applications or participants. While there is significant potential in the long term for untrusted parties to exchange commercial transactions, the next two to three years will be

organization. A startup might normally need days or week to draft legal documents, assign option or share ownership, begin fundraising, and set up business rules for coordinating efforts internally and externally. With a DAO, you can implement all of that in a day. DAOs work by turning the current rules that govern businesses into software code, reducing friction in operation. Even better, because they are software, they can be upgraded, modified, and instituted much faster and at lower cost than a traditional reorganization or restructuring. Instead of being managed by fallible individuals, DAOs will harness the wisdom of the crowd to make sure that things get done by the right people and at the right time. Each will have its own token that represents a share of the ownership of the organization. Smart contracts are programmed to distribute ownership tokens according to the value each

more hype than tangible benefit. That said, organizations can still position themselves to take advantage of the technology by understanding the potential business opportunities, as well as the capabilities and limitations of the technology.

Event Driven Digital business moments, which are a combination of business events that reflect the discovery of notable states or state changes, will drive digital business. While a simple example would be the signal that a purchase order has been completed, as the IoT and other technologies emerge, complex events can be detected more quickly and analyzed in greater detail. Gartner suggests that enterprises should embrace “event thinking,” given that by 2020, event-sourced, real-time situational awareness will be a required characteristic for 80% of digital business solutions, and 80% of new business ecosystems will require support for event processing.

Continuous Adaptive Risk and Trust The security world is constantly changing as threats and threat protection evolves, as evidenced by the string of high profile hacks over the summer. Continuous adaptive risk and trust assessment (CARTA) allows for real-time, risk and trustbased decision making with adaptive responses to security-enable digital business. To make CARTA a reality, organizations should explore integrating security into their DevOps efforts to deliver a continuous SevSecOps process, as well a explore deception technologies to catch bad actors that have penetrated the organization’s network.

individual contributes. Contributors can later trade their tokens on the open market for cash. It comes with a reputation system that allows people to review and grade others’ contributed work. This system allows companies to choose the best candidates while enabling freelancers and experts to build influence and demonstrate their skills. Aragon, Colony, and District0x are three of the open-source blockchain projects currently leading the charge in this space.

50 E-PAYMENT REVIEW December 2017

Year-End Edition

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NIGERIA'S PREMIER DIGITAL BANK ALAT

Bank from the palm of your hand

ALAT IS, OBJECTIVELY SPEAKING, THE MOST DISruptive fintech innovation in Nigeria in 2017. The impressive range of accolades it collected this year bear out this national truth. It won the Best Digital Banking Platform in 2017 at the BusinessDay Banking Awards, took the Excellence in Branchless Banking trophy at the New Age Banking Awards 2017, was nominated as the best innovative digital solution in Nigeria by the World Summit Awards and was named in the top 40 Global – Best & Most Innovating Digital Solution by World Summit Awards 2017. Since May this year when it entered the market as Nigeria’s first digital bank, Alat is finally revamping banking and sparking the kind of innovation that many have long expected from the banking sector. Just a couple of years ago, the act of transacting via a mobile banking app was fraught with obstacles. Different kinds of Alat inspired novelty are finding their way into most of the country’s digital banking platforms and services. Its exponential rise became impossible for Nigerian banks to ignore. While some key aspects of financial services have been frustratingly antiquated, Alat’s popularity seemed to spark a fire under them to innovate. It is hard to call it coincidence. As banks become increasingly digital, there is a race to capture the most innovative tech and put it to good use. What stands Alat apart is that innovative tech was its starting point. According to Zhiwei Jiang, global head of insights and data at Capgemini financial services, to build a true digital bank, “the starting point, endpoint and digital journey need to have the customer as the main driver from both a design and building point of view.” ALAT keeps customer experience at the forefront of its digital process. It was birthed out of research and insight to address the specific needs of a market dominated by millennials who yearn for a bank that suites their lifestyle; a bank whose services will not require them to abandon their digital routine (think social media, and online maps), that would give value – directly and indirectly, and would use the best of technology and digital offerings to enable them attain set goals with respect to their finances. Alat's mission is to meet the aspirations of millennials through digital augmentation. It is built specifically to offer them the service of their choice through the access of their choice. It is completely designed experience created upon a digital core infrastructure with accessibility provided to every mobile user in Nigeria. What then most makes it special, however, is its approach to simplifying everything to do with a customer’s finances into a user-friendly app. The app makes it possible to open an account without a human conversation, focusing purely on the digital experience. It provides a real-time breakdown of spending habits, and enables quick mobile money transfers, as well as seamless day-to-day uses like bill payment and mobile account top-up. Beyond that, it is useful that the bank tried to decompose the notion of “ease of use” into every aspect of the app's design. It helps you plan your spending, shows you where your money is going, saves you money on everyday needs and grows your savings with up to 10% interest every year. 26

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get this, you can fund your account directly inside tha app using other bank card. “When we launched ALAT in May, we made some promises to everyone who banks with us and we have not failed to deliver on these promises,” said Dele Adeyinka, chief digital officer of Wema, which created Alat to deepen its share of the market. “Technology has opened up various options through which banking can be made easier, faster and even more rewarding. We have been able to exploit the capabilities technology has offered to become a part of customers’ life. We are tailoring the solutions we provide to the lifestyles of our customers.” A little humblebragging may be merited for what Adeyinka and his team have achieved. The quality of the product is a testament to his grasp of the fintech industry and the impact it is supposed have on the financial system. It is also evidence that he is a well-grounded IT and banking professional. Adeyinka litany of qualifications bear this out. He is a chartered accountant, a Certified e-Business Consultant (CEC) ordained by the Internal Council of Electronic Commerce Consultants in the United Kingdom, a Microsoft certified system engineer and a PRINCE2 certified professional with strengths in project management methodology. In addition, he is also an Oracle Certified Associate (OCA) and an Oracle Certified Professional (OCP) with abilities in relational database management system (RDBMS) Adeyinka is the Chairman, Committee of e-Banking Industry Heads (CeBIH) in Nigeria, which is made up of top level decision makers of the electronic business arm of all the banks. The mission of the committee is to provide a forum to discuss challenges executives in the digital channels space are facing, share best practices and identify current and future issues to be subject to regulatory/legislative action. With many start-ups leaping forward in the digital space, traditional banks have often lagged behind. However, Alat has managed to speed ahead of the rest in its bid to transform it into a millennial brand. Some neat extras are helping it hold its popularity, like the 24-hour customer service system that can be reached via email, phone or social media (Facebook, Twitter and Instagram). Another is the account opening feature that allows customers to carry out all banking transactions without having to enter a bank. This is very appealing to the percentage of people with an aversion for banking halls. “It is a true statement about Wema

Bank that it is the only surviving indigenous bank in Nigeria. We started banking business since 1945 and on May 2, Wema Bank clocked 72 years in the banking industry. We have been in the financial business for quite a long time and the bank is currently the only surviving indigenous bank in Nigeria that has been been doing retail financial business. Technology has helped us this far to do effective retail financial business since 1945 and we are leveraging the Alat app to further digitise the operations of the bank that will bring about digital disruption in the banking sector,” said Adeyinka in an interview with ThisDay days after launching the bank. From account opening to verification to card PIN change, smartphones mainly drive Alat. Anybody with a smartphone can fulfill transactions from wherever they are. You can open an account via the app by entering your bank verification number and receive a bank account number instantly. You can upload documents needed for KYC (a valid ID and utility bill), and request for a debit card right away. True to the promise, your debit card gets delivered to you within less than a week from the date of request so that you have no reason to visit a branch. Well, there’s actually no branch to visit, just one head office in Lagos. However, if you need to make cash deposits, you can do so at any Wema Bank branch nationwide. Alat’s ease of use effortlessly became huge profit driver on its own. After going live in May, it received tremendous support and response from the market. Two weeks after its launch, 15,000 people signed up. The volume of deposits was also impressive, at over N150 million. By mid-November, the customer base has grown to over 150,000 and deposit volume to over N1billion. With the customer loyalty it earned, the bank plans to hold its ground for the next year with an aim of hitting seven figures in the number of users with new user-friendly services like micro/consumer loans and personal financial planner. Other products it is planning to bring to market in the next six months based on customer feedback are the introduction of AI and virtual assistance and econographic gamification. Besides, as the company grows, Adeyinka’s role as chief digital officer would change from building a great product to building a great bank that sustains a future where there are no brick-and-mortar branches. Just financial products served on a single platform, generating synergy and revenue for Wema and a robust, accessible user experience for customers.

AELLA CREDIT

Building Africa's credit culture Aella Credit is a startup focused on employee lending affiliated with the three main credit bureaus using technology to make it easier for individuals in Nigerians to gain access to instant, collateral-free loans. The company uses a proprietary algorithm to evaluate borrowers on it's mobile lending and money pooling platforms. Aella raised an undisclosed follow-on round of seed funding this year from investors including 500 Startups and Y Combinator as it grows its user base and expands into blockchain-powered lending.

KUDI

Pay by chatting with a bot Y Combinator-backed Kudi, which recently launched in Nigeria, is aiming to make it easier for people to pay bills and pay each other via messaging. At its core, Kudi is a chatbot, which lives inside Facebook Messenger and eventually Skype, that helps you transfer money, buy airtime for your phone, pay bills and stay on top of your accounts. Since Kudi is part of Facebookâ&#x20AC;&#x2122;s Free Basics, it doesnâ&#x20AC;&#x2122;t cost any data to use. To send a payment to someone via Kudi, all you need is their phone number.

COWRIEPAY

Buy products now and pay later

DELE ADEYINKA Chief Digital Officer, Alat. The digital bank is leveraging technology to prepare Nigerians for the future banking

CowriePay is a payment gateway allowing customers to buy now and pay later, in partnership with licensed financial services providers, like fund providers, and retailers/merchants. Customers can also send money and receive money from anyone with an email or mobile phone number. Users of the platform can spread payments for a period of up to 12 months at the check out point.

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AMPLIFY

Manage recurring payments Amplify is a payment solution that helps African businesses accept and manage recurring payments from customers using their cards or directly from bank accounts. It has a proprietary technology that intelligently routes and retries transactions to increase the success rate of transactions.Its suite of tools offer other value added services that include deep insights and analytics that helps business managers make better decisions via engagement tools like email and SMS, loyalty programs, amongst others.

FRIENDSVOW

Access unlimited financial stream

Friendsvow is a peer-to-peer platform that facilitates direct payments between peers. It lets you invite your friends to make a vow of empowerment for you to receive a line of credit. All vows made by every member is guaranteed by friendsvow algorithm,utilising a time tested system and process. The mixed money pull by friends, will create a massive financial network that guarantees continuous cash flow.

SURECREDIT

Easy way to furnish your new home SureCredit is a voucher financing platform for employees of selected companies. Employees can get a voucher to purchase an asset or service from several merchants in Nigeria. They can also pay later in installment from their salaries. At SureCredit, employees of selected companies are pre-approved for vouchers that can be used to purchase holiday trips, expensive home appliances, gadgets, electronics, medication, luxury goods, consumer goods or other essentials. The value borrowed will be deducted from their salaries over a specified period. 28

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A THRIVING AGENT NETWORK PAGA

Providing real access to financial services to the unbanked

IN TODAY’S WORLD, ONE OF THE KEYS TO ANY successful business is being able to come up with new ideas that show a glimpse into what is possible through technology. Tayo Oviosu did just that when he quit his job in the United States to return home in 2008 to start Paga. Though the company was birthed from his frustrations with the limited payment systems in Nigeria, its disruptive inclination has enabled it to become completely ensconced within Nigeria's payment system. Now saluted as a leader in the fintech community, Paga has come a long way since it was launched nine years ago. Its outsized role in supporting small- and medium-sized enterprises both as agents and clients is an indication of its value to the ecosystem. Over 6,000 businesses are leveraging Paga’s reliable and flexible nationwide network to collect and disburse payment online and offline. Thanks to it they can spend more time growing their business and less time worrying about payments. Examples of such businesses include Dangote Foundation, Ikeja Electric, Eko Electricity, UK Immigration and many more. Currently, it has over seven million customers who are able to send and receive money, pay bills, buy or send airtime, and receive transfer payments even from other countries directly to their phones or at over 13,000 agent locations in the country. What is more. It is because of Paga that agent banking has become a realistic goal in Nigeria. The company made significant leaps to accentuate the perception of financial services agents as more than something realistic and not just a speaker circuit hokum. Its broad number of agents, double the number of branches run by Nigeria’s entire banking sector, makes it the nation’s largest financial services distribution network. Through strong partnerships with passionate entrepreneurs, Paga is making a physical connection with communities to address payment related needs. These agents facilitate payments for goods and services, they can deposit cash directly into a bank account on a customer’s behalf, and can redeem payments sent by a Paga user to a non-user’s phone. “Our agent network, which is the first pillar of our business, comprises entrepreneurs ranging from pharmacies, mom-and-pop shops, and grocery stores that act as a place in the community that conducts transactions for customers and holds a great deal of trust,” Oviosu said in an interview with The Guardian last year. “This way, an individual is able to visit an agent close to their home or office to send money, deposit into any bank, pay all their bills, and soon open savings accounts and get access to loans. Customers can send money to others, and recipients do not even need their own Paga account to access it. We have partnerships with 10 different banks, which allow customers use their ATM to collect their money without a card.” Since 2009, the company’s disruptive potential has proven essential in helping tackle the key banking challenges Nigerians face every day. Paga’s passion and inventiveness is evident in the way that it does business. As further

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opined by Oviosu, the second pillar of its business involve providing a suite of payment solutions that serves consumers. For individuals, the self-service option is available through channels that include: desktop/mobile web (mypaga.com), mobile apps and the *242# short code. When you open an account you get a wallet that can be linked to your bank accounts, or save your debit cards for use on Paga or on any ecommerce site where payments are powered by Paga. You can also move money from any bank in Nigeria to Paga instantly – the same way you transfer to other banks from your online or Internet using your Paga account number. “The third pillar is designed for businesses. We offer a suite of tools to help businesses conveniently collect and make payments. Online businesses can use our gateway to collect payments from anyone who has a Paga account, MasterCard, Visa, or Verve Card. SMEs who do not have development expertise can setup a Paga Payme page in less than five minutes – they get their own url, list their products, and can also collect payments from anyone. We also offer bulk payments, allowing businesses to use our platform to process payroll or any disbursement,” Oviosu said. There could be said to be a fourth pillar – forming strategic partnerships that would help it secure its positions as a full-service payments and digital financial services provider. Which was exactly what it did in 2017. Earlier in the year, Paga announced a collaboration with the Lagos State Employment Trust Fund (LSETF) to promote entrepreneurship and employment growth and deliver financial services across Lagos. It inked a deal with the Nigerian Postal Service (NIPOST) to extend the reach of its mobile money agent network leveraging all NIPOST offices across the country as financial services points. In June 2017 the company also announced a partnership with MFS Africa, a Pan Afrikan company that provides a gateway for the sending of money to mobile wallets. The partnership will allow Paga users and Nigerian bank account holders to receive remittances from around the world. LSETF is a N25bn scheme designed to help Lagos based micro and small medium enterprises (MSMEs) scale their business. The fund expects to create 300,000 direct and 600,000 indirect jobs within 3 years by supporting at least 100,000 MSMEs. The partnership involves extending loans to over 1,000 agents to hire more people and expand their businesses and take financial services down to places where people could not access them. The relationship with MFS means that anyone with a Paga wallet will be able to receive money transfers from other mobile money users across the continent or from any money transfer operator connected to the MFS Hub. "Together with MFS Africa, Paga is linking millions of mobile wallet users and bank account holders for seamless transactions across networks and across borders," said Jay Alabraba, co-founder and Director of Business Development at Paga. The NIPOST deal is a far more beautiful story. It has within it the ingredients of all the plans and dreams ever espoused or conjured about financial inclusion in Nigeria. In an interview with DHL’s Delivered Magazine Oviosu had said that “if Nigeria is to be the economic juggernaut it really could be, you have to solve payments and make it easy for people to pay or get paid. And it has to be easy for people to access finance.” Partnering NIPOST will surely and easily create that access. The two organizations believe that the post office will prove to be a critical element in financial inclusion. When fully operational, the plan will remodel post offices into miniature banks that can provide finance to what are traditionally known as unbankable or unsecured lending opportunities. According to Paga, the initial set of services to be offered are deposits and withdrawals from bank accounts and mobile money wallets, utility bill

PAGA

TAYO OVIOSU CEO of Paga A mission to help change the face of Nigeria and Africa at large, by helping to bring ideas to life

payments and airtime recharge for all telecoms networks. Additional services, including savings and loan products, will be launched in partnership with banking partners. The future could see the addition of the partnership into the ATM system and the distribution of grants. The truth is that Paga has shown a readiness to thread where others dare only to dream. It has shown a willingness to take action and set a number of things in motion. Besides, it has the capacity. In 2016, Paga securely processed 9.5 million transactions worth over N156 billion. It goes over and beyond to comply with both local and global security standards. The company also works with strong partners, such as Nigeria Deposit Insurance Commission, Interswitch and NIBSS. It recently acquired the PCI DSS certification joining the ranks of companies like Visa, MasterCard, American Express, Discover and JCB to offer word class security standards. Little wonder then that it had been receiving accolades for its efforts. In 2017 alone, Paga was recognized by the World Bank and the International Monetary Fund (IMF) for having the fastest-growing agent network in Nigeria and for its role in driving financial inclusion. It wasnamed to the CB Insights 2017 Fintech 250 list, a select group of emerging private companies working on groundbreaking financial technology. It was honoured as the highest transacting non-bank SVA on Quickteller in the Interswitch Connect Award 2017.

Paga has been featured by Forbes, CNBC Africa, The Economist, Techcrunch and other notable publications as a key Fintech organization truly empowering and making life possible for Nigerians. Never resting on its oars, Paga is set to go into

2018 to further empower customers with new innovative offerings. It wants to raise the number of its agents to 40,000 before the end of 2018 in order to connect even more remote and urban areas with financial services while supporting small businesses. That is a lofty goal. E-PAYMENT REVIEW December 2017

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SPACEPOINTE

Pointe of Service way of doing business

PAYLATER

Get a loan with just few taps on your smartphone Paylater is an entirely online lending platform that provides short-term loans in Nigeria to help cover unexpected expenses or urgent cash needs. Customers can apply for a Paylater loan 24 hours a day and 7 days a week with its quick application process that allows applicants to know their status within minutes. With a robust rewards system that increases your level as you display good borrower patterns — such as repaying loans on time and referring friends to the service — you can quickly rise up the ladder and be trusted for larger loans with longer repayment periods. Paylater is a product of One Finance (OneFi), a licensed finance company that provides short-term and affordable consumer credit to individuals who have limited access to finance. It also partners with various retailers in Nigeria to provide point-of-sale financing for consumer goods and household appliances. The company was co-founded by Chijioke Dozie (pictured up) to democratise access to finance by leveraging data and technology.

MICROCRED

Creating strong roots for inclusive financial services MICROCRED IS A DIGITAL FINANCE COMpany that offers financial services to emerging client segments, particularly the unbanked and underbanked, focusing primarily on micro, small and medium-sized firms. Microcred is now active in nine African countries, including Nigeria. With a little over 3,500 employees, it serves more than 600,000 clients through about 1,000 branches and correspondent banks. In its last published annual report, for the year 2015, Microcred said it had an outstanding loan portfolio of €312 million and a savings portfolio of €108 million. 30

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SPACEPOINTE IS A GLOBAL RETAIL technology company founded by Sayu Abend in 2014 with the sole intent to innovate around the needs of small-tomedium enterprises. in African and North American markets. In 2016, the company raised US$1.2 million in funding from multiple investors to launch in-store business management and point of sale (PoS) applications into the market. One of them was PointePay, a mobile application with multiple payment and acceptance options, including cash, e-wallet, and debit or credit card. It allows retailers to manage product and inventory, as well as employees and customers, while also offering value added service such as the ability to sell wireless top-up and perform mobile wallet loads. “Digitising the informal merchant is not just about putting point of sale systems in their hands. SpacePointe now utilises a combination of technology and key business partnerships to overcome the barriers to entry,” said Abend.

MYTRADEBOOK

The broker you can rely on MYTRADEBOOK IS A VIRTUAL SECURITIES trading platform that gives users online access to trade securities on the Nigerian Stock Exchange from any part of the world, without interfacing with a broker. Its trading processors can be likened to trading directly on the floor of the exchange as it offers users control over their investments as well as access to quality research resources. The service, powered by Greenwich Securities, allows investors access to their stockbroking portfolio on any internet-enabled device - mobile, tablet, laptop and desktop computers. Greenwich said the platform uses a world-class payment system that facilitates secure and seamless cash deposits. “The system allows you to commence trading immediately your cash deposit is confirmed” it said. Mytradebook eliminates delay in jobbing orders, receiving notifications for executed transactions, accessing account statements and portfolio valuation. It offers the investor online real time access to the largest market in West Africa as well as direct interface with National Association of Securities Dealers (NASD). Various asset classes such as equities, fixed income and exchange-traded funds can be traded on the portal. “The investor can also view his/her holdings and evaluate the portfolio performance,” Greenwich said. “In addition, users will get intelligent market insight through our research materials and interact directly with our customer service team through the portal’s online chat tool.” To open “Mytradebook” account, customers are required to pay N10, 000 and are charged a brokerage fee of 0.75 percent.

REMITA

See all your bank account on one screen REMITA IS AN E-PAYMENTS AND E-COLLECtions solution on a single multi-bank platform. Today, Remita is used by many individuals and public and private sector organizations that process over N500 billion worth of transactions on a monthly basis. Adopted by the CBN for the payment and collections of funds on behalf of the Federal Government of Nigeria and used by all 22 commercial banks and over 400 micro finance banks, Remita has significantly assisted in revolutionizing the e-payment industry in Nigeria. It also comes with an optional payroll and HR solution for fully integrated processing. SystemSpecs, the company behind Remita, released a full version of its Remita Mobile Application, for both Android and Apple phone users this year. The company said it was to give individuals a handy access to their bank balances on one screen, conveniently make and receive payments across various bank accounts,settle various bills, request payment in style, easily manage their expenses, view their payslip, and generally stay in control of their finances. SystemSpecs was founded in 1991 by John Obaro to sell software to organisations. Its first locally developed software was HumanManager, a human resource application.

MKOBO

The power of microfinance: MKOBO IS A MICROFINANCE BANK CONCEIVED to give consumers access to short-term emergency credit using digital technology. The bank caters to the demography currently underserved by the commercial banks, and its aim is to help increase financial inclusion of the Nigerian population. Mkobo does not require any collateral or guarantor in offering a range of short term loans for personal or business use. It offers finance to individuals or businesses looking to purchase assets. You can apply for loans on their website using an online calculator to estimate your interest and repayments.

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THE ADVANCED RETAIL IT SYSTEMS GLOBAL ACCELEREX

Ensuring your brand survival in the age of digital power

WHEN IT COMES TO PAYMENT, GLOBAL ACCELEREX is undeniably a visionary enterprise. In 2011 when the Central Bank of Nigeria (CBN) decided to license payment terminal service providers (PTSPs), it made a big bet on electronic payment solutions that paid off, charged full bore into delivering innovative technology when there was a preference for the generic stuff, and recognized early on that its competitive advantage in the business would come from an ability to focus on value added services that would give more influence to the merchants and consumers who are shifting to digital. Owing to these combination of factors and other later ideas, Global Accelerex today offers everything merchants need to foster cashless transactions on a one-stop basis: payment systems, risk management and reconciliation. As of August 2017, the company had 30,000 merchant clients and it handles billions of naira in transactions. It has increased volume mainly because of early-mover advantages that have allowed it to build scale as well as position itself to offer many different services across channels, which diversifies its revenue streams. Since it came into operation, Global Accelerex has constantly strived to give customers the best possible point of sale experience. Apart from its latest value addition, it has pioneered other integrated products and services tailored to fit the unique needs of its ever-growing clientele. Its service offerings include platforms of choice for client initiatives such as invoicing, order management and bill collections; ability to track and manage assets by several parameters; automation of key acquirer internal business processes; and improved metrics for operations performance monitoring and reporting. Its service offerings are cross-industry in focus, from financial institutions to the fast-moving consumer goods sector, telecoms, and government. The company’s innovativeness comes from offering world-class, cost-effective and superior quality products to merchants including Point of Sale terminal sales, provisioning, deployment, management, and support. Its daily preoccupation is ensuring secure, transparent, and efficient payment processing. Terminals from Global Accelerex are of the high quality variety; are cost effective and have varying means of connectivity. They are tailored to specific needs, fulfill the highest standards of security, meet all national and international EMV standards, are economical and can be integrated seamlessly. “In delivering the value that we provide to the customer, we discovered that the banks cannot continue to build branches. We needed to be there to enable this cashless payment happen,” said Olatunde Ogungbade, Managing Director and CEO of Global Accelerex in an interview with E-Payment Review. “At Global Accelerex we thought of how can we join forces with the banks to solve this problem. We designed our business model to partner with merchant acquiring banks that specialize in card or any type of payment acceptance.” Being there involved providing the payment terminals, 32

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TUNDE OGUNGBADE CEO of Global Accelerex The company is taking these giants strides because it is led by an innovative and forward thinking team of professionals who envision the creation of an unparalleled enterprise.

which incidentally are the first step in the online payment process, and have proven crucial in helping businesses easily accept digital transactions. With different form factors available, Global Accelerex continues to differentiate itself from other suppliers in the payment terminal market by offering its customers an advanced terminal management platform that includes developing secure applications to power the terminals and easy integration of the systems into the marketplace. Global Accelerex has a fully staffed research and development lab. It works with banks, merchants, and other service providers on a project basis to integrate payments terminals with business systems. Its senior strategy advisory team caters to merchants looking to improve their retail payment systems technology or merchant acquirers thinking of new strategies in electronic payments. The company’s competitive advantage is its ability to focus on value added services which generate business transaction information for business and market intelligence, that can help businesses with more effective risk, production and demand management, sales forecasting, and distribution planning. It also covers retail management, inventory management, marketing, and distribution management all of which currently present a strong business challenge in the subSaharan region because of slow infrastructural development. The payments industry is witnessing lucrative growth owing to innovations in technologies, which acts as a major market driver. Benefits such as reduction in transaction time and improved service delivery offered by digital payments have resulted in a significant rise in the number of users. To further drive those numbers, Global

ITREALMS / BELLANAIJA

Accelerex recently unveiled its Nexgo G2 integrated smart POS terminals which are considered the best in class for merchants to offer a new payment experience because of how it combines portability with efficiency, durability and high operational speed. Presenting the product at the PoS Innovative Summit organized by the company in October, Ogungbade, said the Nexgo was engineered for mobility. He said it is packed with excellent features that cater to the needs of a broader range of merchants and segments. “At a cost structure lower than an mPos, it is almost amazing why any merchant would want to fiddle with two devices other than one,” he said. Kayode Ariyo, Chief Operating Officer of the company, disclosed that the G2 comes with NFC capabilities and is fully certified for PCI 4x, EMV, PBOC, MasterCard PayPass and Visa PayWave. “The G2 offers a rich high resolution 2.4 Inch colour display and can conveniently fit into a merchant’s pocket, making it an excellent choice for various payment scenarios such as internal revenue collections, retail payments, bill/utility payments, distributor/ field sales as well as agent banking”, he said. The device is versatile and allows a wide variety of customized applications for different sectors. For churches, it can be customized with easy menu for collection of tithes, offerings, building funds, among others. For fuel stations, it has the capability for fuel pump integration for both manned and unmanned fuel pumps, stock monitoring and inventory management. For schools, menus can be incorporated for easy payment for uniforms, books, fees and other academic expenses. The device is also enabled for account opening, loyalty schemes for select account holders and closed loop schemes for high value merchants. Great entrepreneurs have to pick where they think they will have the most impact for their skillset. So they try to understand the climate, to read the shifts, to know what is going on. Global Accelerex is taking these giants strides because it is led by an innovative and forward thinking team of professionals who envision the creation of an unparalleled enterprise that would be a strategic financial technology partner to players in various sectors of the economy. Ogungbade himself is a study in professional ability: ingenious, perceptive and aware. He built Global Accelerex to be solution oriented and he is combining his diverse competencies as a business executive, management consultant, entrepreneur, and technology leader to guide the corporate mission. A computer engineering graduate of Obafemi Awolowo University, he has a Master’s in Real Time Systems from London Southbank University, a certified project management professional and a professional member of the Global Project Management Institute (Lagos Nigeria Chapter). He is also a certified SAP technical consultant with an Executive MBA Degree from Robert H. Smith School of Business, University of Maryland. His over two decades of international business management experience and information technology expertise covers strategic planning, investment, enterprise system integration, custom software development, technology operations and commercialization; and infrastructure management. Global Accelerex has constantly striven to give customers the best possible point of sale experience, 2017 saw the company expand significantly, opening regional offices in key commercial hubs around the country, including major cities such as Owerri, Port Harcourt and Ibadan, and reaching new heights in substantial transaction volumes. In 2018, the company is poised for further growth with plans to spread its services into diverse areas of the Nigerian financial technology space and exciting new service offerings for Nigeria and beyond.

LIDYA

Financing for small businesses LIDYA USES MOBILE-FIRST TECHNOLOGY AND PROPRIETARY CREDIT SCORING algorithms to help African businesses and individuals open an account online in 15 minutes, manage funds, access credit needed to grow their businesses and plan their futures. 20,000 businesses have registered for the service. Once a customer has been evaluated by the platform, qualified ones receive a loan in as little as 48 hours based. Lidya has financed businesses spanning agriculture, consumer goods, services, and creative industries, among others, and is targeting N1.5 billion in loan originations to SMEs in Nigeria. "Our vision is to digitize and streamline the credit assessment process to make it easy for any SME across Africa to access the funding they needed to grow their business," said Tunde Kehinde, the co-founder of Lidya. Early in the year the company closed a US$1.25 million seed funding led by Accion Venture Lab, the seed-stage investment initiative of financial inclusion leader Accion, which invests capital, and provides support to innovative fintech startups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale. Newid Capital and several angel investors also contributed to the round. “This round of funding and backing from our world-class group of investors is a strong validation of the potential of fintech in Africa and will position the company to be the go-to source of financing for entrepreneurs looking to grow their business,” said Ercin Eksin, co-founder of Lidya.

NOWNOW

PAYUP

PIGGYBANK

Agnostic online platform

Accept payments on the go

The service that makes you save

NOWNOW IS A MOBILE payments platform that lets you pay bills quickly, top up your data or airtime instantly, send and receive money with rewards. The amount paid by consumers is returned in the form of cash back and coupons, thus making the recharge almost free. The company is PCI DSS compliant and offers an agent platform that enables additional streams of revenue for individuals and businesses along with providing financial services to the unbanked – a service that allow them to offer P2P, bank transfers, cash out, mobile recharge, pay bills etc.

PAYUP IS A MOBILE payment and MPOS startup focused on delivering a low cost, more scalable alternative to the traditional banking and payment options to Nigeria. It offers a free point-of-sale app that works with a mobile card reader connected to a phone or tablet that transforms it into a card acceptance terminal. PayUp Register is the POS app that helps you process card payments quickly and on the go. It takes care of digital receipts, inventory and sales management. It serves businesses both big and small, from the corner supermarket to nationwide retail chains.

PIGGYBANK.NG IS A PLATform that works with financial institutions to enable users to save little amounts of money periodically (daily, weekly or monthly) without too much fuss. UBA warehouses the savings although customers do not need to have accounts with the bank. The deposits are insured by NDIC, according to the company. Piggybank. ng simply provides the saving technology. The system allows users to withdraw their funds for free on set withdrawal dates, thereby making saving more possible for users by eliminating the temptation to use the money.

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SHAPING ONLINE PAYMENT SYSTEMS VOGUEPAY

Empowering SMEs) to take more control of their finances

VOGUEPAY

VOGUEPAY STARTED OFF 2017 ON A HIGH NOTE. Having won the African Online Payment Platform of the Year at the 6th edition of the African Achievers Award 2016 organized by the Institute of Leadership and Management and Achievers Media, its agenda for the year seemed determined – to become even a smarter payment company. Months later, it would be named the “Best Fintech Startup” at the Cashless Africa Award 2017put together by Mobile Money Africa. It is easy to get carried away by the shiny nature of these prizes and overlook the market forces that drove VoguePay to win these awards. Aside from the fact that the company’s business encompasses payment processing/aggregation, its propelling element is a deep desire to innovate a smarter way for both large and small businesses to accept payments and at the fraction of the cost. The VoguePay team is passionate about fueling the true spirit of digital payment for businesses and consumers across Africa and with the rest of the world. This means that they have to create stronger commerce relationships, ensuring a low-cost investment in time and money by eradicating the red tape stopping small businesses from sending and accepting payments. Payment connectivity used to be out of reach for businesses in Africa because of cost. VoguePay changed that when it launched to aplomb in 2012, an online payment processor with mandate to enable merchants to receive and make online payment for goods and services. Even with the entry of such industry standards like PayPal and Mastercard and Visa, small business owners still had limited or no digital payment options when it comes to accepting payments from their customers and clients. The size of their businesses was a factor, even when put together, they could not equate to what the big names were used to and the banks were not very willing to devote resources to find a way to bring the business into the online payment space. With digital payment becoming a way of life, VoguePay engineered a collaboration between Nigerian banks, local payment gateways and issuing houses as well as MasterCard and VISA international, to open a new conduit to online payment. It created a shift in the financial industry paradigm by making transactions a lot easier for businesses who were already disenchanted by the cost demands of the ecosystem. With scalable technologies to offer end-to-end payment and business solutions, VoguePay eliminated integration cost, removed the barrier to entry for business-to-business (B2B), business-to-consumer (B2C) and peer-to-peer (P2P) markets and opened the door to any entity – commercial, religious, academic, ecommerce, charitable, and industrial - that wants to receive payments online. Those without a website could initiate and receive payment via email and SMS. With its ready-to-use "out-of-the-box" payment gateway, which small businesses can “switch on” without the need for technical resources, anyone can start accepting payment from local and international card holders. Integration is 34

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Adiele Lloyd, chief innovation officer at FINCODE presenting the award for Best Fintech Startup to Geoffrey Weli-Wosu, director of marketing, legal and compliance and Wole Ogunlade, head, digital media and strategy, both of VoguePay.com at the Cashless Africa Award 2017, organizedby Mobile Money Africa. (L-R) Christopher Ifejika, Installation Director Africa, General Electric presenting the award for African Online Payment Platform of the year to. Mohammed Ibrahim Jega, VoguePay’s Director of Business Development, Africa, VoguePay at the 6th African Achievers Award. With him is Ms. Kemi Oreola, CEO, Vivacity PR international.

free and businesses gain access to new territories, which in turn impacts their growth strategy because with such easy access, businesses can execute initiatives that open up new markets, customer bases, and revenue streams. Payment can be received in all major currencies. Conversely, the company enables international businesses to also tap into Africa’s vast market by providing the capabilities to collect, convert and repatriate their money in one single sweep. What its minimalist methods demonstrate is that when it comes to being a payment company, VoguePay knows what matters: that customers are the reason for any business and that in a world where technology makes everything easier, payment convenience should be a given at every point. So it places customer needs above everything else. Using data analytics, it gains actionable insights about its customers, target them across all channels, and assess what product features would help attract and retain the most profitable ones. VoguePay’s customer-centric behaviour is driven by a belief that an efficient payment system should do more than just receive payment and process withdrawals. It must be able to support other aspects of the clients’ processes. In the way that the company distributes its services, clients believe the platform has become a game-changer. That belief exists on so many levels and in so many places within the digital finance ecosystem. For many, VoguePay functions as the glue that helps different entities, businesses, governments and individuals easily connect with a variety of payment platforms -- like mobile money services or banks -- and the customers who pay via those services. Its boom has been fueled by good relationships with federal, state and local institutions, along with other private and public organizations. While these connections sound impressive, they have translated into high profits for the company. The success is managed by innovators that include Michael Simeon (CEO), Leke Ojikutu (CTO), Geoffrey Weli-Wosu (CMO) and Quam Ojikutu (COO), with talents and experience from the United Kingdom and Nigeria who leverage local, cultural and environmental knowledge gleaned from European finance sector best practices. The team's mantra is that “businesses in Africa need to compete on the same level playing field as their international counterparts and

this would require a payment platform that serves individual Africans’ payment experience.” To them, Africa’s population of more than one billion people represents a big opportunity for any business that has a global outlook. That is why Vogue Web Solutions has its international headquarters in London Canary Wharf and runs operations from offices in Lagos and Kampala. As disruptive technologies continue to change the global economic landscape, VoguePay has concrete plans that it believes will alter the dynamics of the payment market. To make further inroads, the company is building partnership programmes with establishments that focus on helping business owners and is revamping its products to meet the transactional lifestyle of today's millennials. These new changes are inspired by its understanding that consumers are “outgrowing” the old ways and channels that banks used to support them and that responsibility lies on fintech companies to innovate a new payment order. According to Michael Simeon, VoguePay is preparing for this opportunity in a couple of ways. First is releasing a new product at the end of 2017 that addresses some of the pain points in online payment while second is gearing up for new product categories in digital banking by leveraging blockchain technologies to power transactions using cryptocurrency. In response to the needs of clients, it will be introducing new features on its platform to help them improve their business processes and efficiencies. It will also be creating niche products solely targeted at enhancing the way financial resources (read remittances) flow into the country. Nigerians in diaspora will be enabled to

access financial solutions and services that are currently impossible in our traditional banking system. The technology to achieve this is already being tested and will be fully deployed in 2018. The company is confident that it has the appropriate strategy, product development team and integration capabilities to successfully accelerate the introduction of these new systems. These products' value proposition will not be restricted to the financial services but are being designed to hit back at payment fraud. VoguePay plays a crucial role in preventing payment frauds since the victims usually do not have the resources or capabilities to absorb such losses. According to Ojikutu, its chief technology officer, VoguePay has designed several antifraud protocols and intelligent approaches to eliminate possibility of fraud or stop it before it succeeds. “hese measures include data storage and transmission on strong encryption technology, safe user authentication procedures at login and secure session handling. We combine several principles to authenticate the author of a transaction as being rightfully authorised to carry out such transactions,” he said. As a security check, VoguePay provides ‘Know Your Customer’(KYC) and several second-level authentications to prevent unauthorized access to merchant’s account. Other security algorithms such as geo-location monitoring, behavioural and transaction pattern analyses, IP monitoring, audit trail, and data encryption are preemptive security measures managed by fraud control experts to fortify customers’ accounts. All this is why the more people learn about VoguPay, the more excited they are by the potential for their payment future.

EGM

CREDIT WALLET

Easier credit for salary earners CREDIT WALLET IS A lending platform powered

by Princeps Mulitpurpose Cooperative Society that uses data technology to facilitate credit for salary earners in Nigeria. Formerly 247Cash. ng, the platform connects borrowers to lenders and guarantees borrowers’ prompt payback. Also, it receives a commission on every successful transaction.

REACH

Trade global markets Eagle Global Markets (EGM) is a multi-asset derivative trading provider located in Lagos, Nigeria. The company provides its investors with a range of services such as indices, forex, commodities, equities and much more. Apart from being available on desktop, mobile and tablet devices, EGM enables its clients to trade in naira. Its next generation trading platform offers tight spreads and competitive margins.

THRIVE

Know where your money goes

Send money across Nigeria at low cost

REACH IS AN APP THAT enables users to make intelligent money saving choices. The app is easy to use and intuitive. Simply type how much you need to save, and by when the amount should be complete. The app will generate the daily, weekly or monthly amount that needs to be deducted. The funds are kept in a Zenith Bank account as a layaway account that’s NDIC insured and monitored by a third party.

THRIVESEND, BY FLUTTERwave and Venture Garden, is a money transfer service that makes it possible for anyone with a local or international Mastercard, Visa or Verve card to send money to any verified Nigerian bank account for just N45, which is much lower than what many bank charges. It is accessible via its website and mobile apps for android and iPhone. It is very easy to use and requires no registration or log-in.

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A FULL PAYMENT SOLUTIONS COMPANY GLOBASURE

The power to offer better payment options to everyone

IF YOU WANT TO MAKE IT AS A DIGITAL PAYMENT COMpany it will make sense for you to figure out how to do it much cheaper and much more transparently with much lower friction to both the recipient and the sender. Globasure Technologies symbolizes that intelligence. Its mission is to build, implement and maintain innovative end-to-end electronic payment and card management solutions based on the latest software infrastructure for the new world of ATM, EFT-POS, mobile and internet technology. It is inclined to do it in a way that helps merchants and customers to reduce costs, maximize profit improve, client relations, and transact very securely. The company’s extensive suite of solutions and services were developed as a promise to help lead Nigerians into the next generation of smart and secure systems through assisting clients and partners with strategic business growth, industry insight and compliance requirements. Globasure’s reputable track record for innovation, reliability and flexibility with merchants, financial institutions and value added resellers in processing cards and other non-cash payment is what sets it apart from the rest. It delivers all-encompassing, and yet, straightforward services to businesses of all sizes. The list of its solutions, products and services are catholic including payment gateway, electronic voucher distribution, bill payment and collection, agency banking and connectivity management. In 2013, the Central Bank of Nigeria (CBN) approved Globasure Technologies to operate as a Payment Terminal Service Provider. The company provides payment terminals, devices, routers, peripherals and other consumables to the payment industry. Globasure has the accumulated depth of experience and knowledge necessary to offer and support payment processing to any industry today. Not only that. It leverages the collective resources of its partners to provide products that can be implemented efficiently to help clients achieve optimum outcomes. For example, by means of a strategic partnership with France-based payment company, Ingenico, it develops and deploys POS terminals. Early this year, it teamed up with licensed mobile money operators, Funds and Electronic Transfer Solutions (FETS) to roll out Mobiwire Mobiprint3 to power electricity bills payments and funds transfer. With a wide touchscreen, an Android OS, an excellent battery life and an ergonomic design, Mobiprint3 has proven to be the ideal PoS terminal for distributors. Its design is based on a Smartphone (GPRS, EDGE, UMTS, HSPA) combined to a robust printer that enables transactions (cash collection, proof of purchase tickets, receipts) and POS data management. Adapted and dedicated to cash payment regions where banking services tend to be rare, the Mobiprint3 replaces bank accounts by using mobile accounts. FETS agents experience quick transaction timeline, ease of use and the flexibility of the machine when they use it for payment services that include e-voucher, cashier, top-up, mobile payment, lottery and sports betting. Months after it started operations, Globasure integrated its payment technologies into Servpoint, a platform that allowed customers to make payments with their mobile devices - not only online, but also in physical stores. This distributor management system offers a superior commission structure to agents operating

E-PAYMENT REVIEW December 2017

CHRIS IFE CEO of Globasure Helping to create, build and maintain the most innovative, reliable and cost-effective payment systems on the GEVDS supported products such as mobile airtime, Pay TV, Utility, Internet, lottery, betting, lotto, tickets for buses, trains, cinema, concerts. Today, It supports subscription on digital terrestrial television service, Startimes. Payment can happen across all the channels – Mobile, POS, web, ATM, kiosk. Online marketplace OLX and other ecommerce players in Nigeria depend on the ServPoint platform for their pay on delivery service. OLX adopted it after series of testing and evaluations. The Pay on Delivery Solution offers security, well rounded reporting portal to enable its user accept both cash and card transactions. It is available on both mobile and POS. As agency banking is fast emerging as the solution of choice in tackling the need for greater financial inclusion, it is not just the unbanked who are crying out for more accessible banking services; even customers with access to financial services but who do not have the time or the means to travel to their local branch are also desperate for more flexible banking services outside the branch. The Globasure agent portal has been designed within a high level technology network that outsources significant parts of branch banking services, such as cash withdrawal or deposit, transfers, balance enquiry etc. The functionally-rich agent interface is suitable for places with poor infrastructures and areas where the cost of traditional branch establishment is high and very often not feasible. It is built to support business hierarchy with different business participants such as banks, financial institutions, switches and processors, agents and, sub-agents. Banks can assign different access levels for particular agents; for example, an agent with basic access could perform transactions such as bill payment for utility or school fee payments or carry out transfers on behalf of the customers. Today, Globasure’s client base has sky-rocketed with the adoption of its products offering by financial services giants like UBA, Unity Bank, FCMB, Sterling Bank, Stanbic IBTC and a host of the other banks. Most of them

OSUSUMOBILE

A better way to save

OSUSUMOBILE IS A FINANCIAL SERVICE BUILT IN partnership with Ecobank Nigeria to push financial inclusion and make basic banking services accessible to the unbanked and underbanked. Its range of products includes My Osusu, Osusu Groups, and Fixed Osusu. OsusuMobile is an agent-centric way of banking that enables individuals save money with agents in an easy and convenient way, using mobile phone. OsusuMobile charges 5% of total savings on cash withdrawals.

SUREREMIT

Ecosystem for global non-cash remittances SUREREMIT IS A NON-CASH REMITTANCE PLATFORM that Africans in the diaspora use to send money home. It uses vouchers that can be redeemed directly and instantly at hundreds of popular retail merchants across Africa at zero cost. Users can pay bills and top up mobile phones. SureRemit is mobile-first and is live in Nigeria, Kenya and Rwanda. The company is connecting its crypto product — which is not redeemable by consumers for cash — to a network of pre-approved merchants in the aforemention countries.Clients can use SureRemit’s app to present tokens as payment for things such as utility bills, student tuition, and online consumer goods. African e-commerce giant Jumia is among its merchant partners.

PAYMYRENT

LIFE.GUARDIAN.NG

Save monthly towards your house rent

depend on Globasure’s smart roaming SIM to power PoS terminals they give to customers. The company was the first to deploy the SIM in Nigeria. It enables PoS terminals to connect smartly and automatically, to all the available GSM networks in any country that it is deployed. The inbuilt technology enables the SIM to auto detect the network with the highest data availability and switches to it. This switching is done smoothly without any data loss. Globasure created these quality products because it understands that Fintech is not like other tech, because it involves somebody’s money, and therefore, must be secure. Money is a very personal part of our lives and customers want an experience that makes the management and movement of money simpler and more convenient, but also ensures that the transaction is secure. Its solutions can help reduce cost, maximize profitability, improve client relationship as well as manage and eliminate financial fraud. Without a doubt, good leadership is at the core of Globasure’s excellence. Christopher Ife, its Chief Executive Officer believes in the implementation of practical goals as exemplified in credible solutions conceived and some already deployed for financial institutions, payment processors, retailers, service providers, mobile operators or any type of business that receives payments. Ife is a graduate of both the Leadership Development (PLD) of the Harvard Business School, Boston, USA and the Accelerated Development Program (ADP) of the London Business School in the United Kingdom. He holds a Masters in Economics and Communications from the University of Lugano, Switzerland and a Bachelors in mechanical engineering from the University of Nigeria, Nsukka. Ife who speaks three languages fluently - English, Italian and German - provides leadership, strategy and management to the company. He began his career in Fidelity Bank before moving to Switzerland to work as a project manager for IBM (International Business Machines Corporation) at its office in Zurich. There, he managed international projects across Europe and Africa. The last position he held in IBM was as sales operations manager. His vision is to build Globasure into a global leader in specialized IT and payment services. In 2018, he wants to grow and expand the company’s business portfolio by launching its new payment gateway and invoicing platform.

PAYMYRENT PROVIDES LOANS RANGING FROM N100,000 to N2,500,000 for house rent payment. However, the amount that can be actually borrowed largely depends on customer’s monthly salary. Approval takes less than 24 hours. After the company reviews customer’s bank statement, it gives an approval; upon the submission of required documents, the customer is credited in less than 48 hours.

APPZONE

Unlocking the potential of financial services APPZONE IS A PROVIDER OF BANKING AND PAYMENT solutions. It has registered about two million accounts, issues over 30,000 cards and processes 100,000 transactions daily. The company provides such cloud solutions for retail and personal banking, commerce, branchless and agent banking, business banking, and mobile financial platform, as well as a range of on-premise products (instant & automated card issuance, prepaid card management, EFT settlements and auto reconciliation, and ATM monitoring). In October, Appzone announced a partnership with Gambia’s biggest financial institution, Reliance Financial Services to offer its BankOne cloud-based suite of pay-per-use software solutions that automate core operations of retail financial institutions and enable delivery of services via electronic and other alternative banking channels. E-PAYMENT REVIEW December 2017

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THE MERCHANT OF DIGITAL SYSTEMS CHAMSSWITCH

Two decades of creating innovative solutions for public, private sectors

HERE IS ONE FACT: IF YOU HAVE AVAILED TECHnology for any service in Nigeria, it is possible that you may have been touched by Chams. From development to sourcing to equipment procurement, Chams has its tentacles in every digital technology pie in the country. And those tentacles are in many pairs: identity management, biometric solution platforms; business process outsourcing services; electronic and card payment systems; mobile payments and ATM/PoS sales, deployment and support. As the front-runner in innovative technology in Africa, Chams has evolved from computer and hardware maintenance to the provision of enterprise management, transaction systems and business intelligent solutions for both the public and private sectors. This December, the company is celebrating over three decades of championing innovative solutions for businesses in Nigeria and Africa. On this journey, its path is paved with a brickwork of accomplishments, achieved through its army of subsidiaries. One of these subsidiaries is ChamsSwitch, which was awarded a switching license by the Central Bank of Nigeria (CBN) in 2009 to provide electronic transactional and switching services for identity management platforms supported by the Federal Government of Nigeria. It offers a comprehensive package of services that aid retail and corporate business transactions including person-2-person (P2P), funds transfers, bulk e-salary and e-pensions, and payment gateway service for web processing (collections). Riding on the capabilities of ChamSwitch, the company has been able to impact virtually all sectors of the Nigerian economy. It offers high-quality, cost-effective manufacturing, personalization and delivery services for a wide variety of cards including EMV-enabled debit and credit cards. Chams' secure, flexible platforms ensure the highest standards and manageability and it works closely with customers to deliver solutions that exactly fit their business models. On top of smartcards production, it also has deployed automatic fingerprint identification systems (AFIS) which are being used on various identity related projects across the nation. The AFIS technology is usable for small to large-scale identification and biometrics based projects. “If you check our history, Chams does not do what everybody is doing. When we started our maintenance, we were the first local company doing it,” said its Group Managing Director, Femi Williams who assumed leadership of the company in April 2015. “We were competing with International companies of these times. We were the first company that started card processing. We love to do things that are bold.” Chams is the brainchild of Sir Ademola Aladekomo, (a Knight of John Wesley), a top shelf IT expert, whose pioneering work on design, installation and maintenance of various local and wide area networks and communications systems are renowned for some of the landmark IT breakthroughs 38

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Riding on the capabilities of ChamsSwitch, the company has been able to impact virtually all sectors of the Nigerian economy.

in Nigeria. He pioneered the electronic purse technology, was responsible for the establishment of the first wide area networking on PC in the country and is acknowledged as the brain behind the success of the Valucard project. Now retired, his ability to synthesize knowledge, experience and leadership powered Chams and its subsidiary companies to dominate the industry. It has the biggest ID card personalization plant in the world and succeeded in producing Nigeria’s first national ID cards and has concession for the new national ID programme. For years now, the company’s e-voting platform has consistently and successfully been deployed for elections into the leadership of the Institute of Chartered Accountants of Nigeria (ICAN). It implemented the one-year project in partnership with Dermalog Identification Systems, a leading global company in the field of biometrics. It successfully executed the biometric enrolment and staff audit for the Power Holding Company of Nigeria; for Staff and students of the University of Lagos, and for the office of the Head of Service of the Federation. It was Chams that provided the popular smartcard and reader used by the Independent National Electoral Commission for the 2015 general elections. Chams drove the implementation of the Bank Verification Number (BVN) project initiated by the CBN and the Bankers’ Committee. When the BVN project was conceived, it was meant to be operated in the banking hall but with the industry able to secure reasonable BVN registrations, Chams decided to take the machines to the hinterland in pursuit of non-banked individuals who need to be part of the financial system. Throughout this year, it embarked on aggressive deployment of BVN to enable farmers have access to credit as part of the federal government’s huge intervention in the agriculture sector. To ensure that farmers, especially those in the rural areas, have access to credit facilities in the ongoing agricultural revolution of the current administration, the company is working with the CBN, the Ministry of Agriculture and Rural Development and the Bank of Agriculture (BoA) to create bank verification numbers for them (farmers). “We are in 20 states now registering people on the BVN platform. The reason for doing this is that the CBN had said no BVN, no credit. And the major focus of current government is to allow farmers to have access to credit since they are doing huge intervention in the agriculture sector,” said Williams. “On top of that, we have started innovating a solution that makes management and giving of the loan easy. In the past, government used to buy solutions abroad, but we have now created better solutions and started deploying those ideas to assist government.” Recently, the company was hired by Osun state to register miners in the state in the government’s effort to end illegal mining and restore sanity into the process of exploring mineral resources in the state, curb environmental degradation and increase the state’s internally generated revenue. The registration became necessary because the state has experienced all sorts of uncoordinated activities by many artisans engaged in unregulated mining. Their operations are wrecking havoc on the environment and causing the state to lose revenue. The government wants to install order and put in place proper regulatory measures to curb illegal mining. In November, Chams said it had captured the biometric details of over 5,000 miners in several mining communities across the state. Part of Chams ability to continue to innovate and dominate is because of its leadership. Williams himself is known for his very hands-on and versed IT skills. He started his career at Chams as a youth corps member in 1989 and rose through the ranks to become the deputy managing director in 2012, a position he held till September 2015 when he was appointed group managing director of the group, having served on the Chams board as non- executive director for over 15 years. Aladekomo himself never truly retired. He exited the day to the management of the company to become a non-executive member of the board. In June, the company announced the addition of three more members to the board as part of efforts to acheve its global objective, expand its ability to take innovation to scale and increase it impact around the world. Those appointed were Pastor Ituah Ighodalo, General Overseer of the Trinity House Ministries

ADVANCER

Seamless on-demand credit solutions THE ADVANCER IS AN alternative lending platform that provides collateral free credit solutions to Nigerian salary earners. This company helps users to secure assured advances or request project financing in minutes. Apart from offering an efficient, speedy, dependable loaning service entirely online, The Advancer charges a flat rate of 7.5% monthly interest irrespective of how much customers borrow. There are no hidden fees, and it does not charge any penalties for late payments.

WALLET.NG

Payments made fast, safe, and simple WALLET.NG PROVIDES ACCESS to financial products through phone numbers. With a wallet account, users can make payments for utility bills, top up their mobile subscription, send money anyone in Nigeria with just a phone number or directly into their bank account and make cardless ATM withdrawals. Wallet.ng also allows individuals to accept payments online from local and international cards by giving users a personalized url link, they can share to get paid.

FEMI WILLIAMS Group Managing Director of Chams Leading player with an innovative portfolio ranging from smart card technologies, cutting-edge payment and identity solutions

International and the founder of SIAO Partners; and Wim Tappij Gielen, Senior Vice President of Government Business Development at Entrust Datacard Corporation (also known as DataCard Corporation) whose more than 35 years’ experience in the card industry, played a key role in establishing Datacard Group as a key provider of secure ID and passport solutions. Also appointed were Mayowa Olaniyan, chief strategist and financial officer for the Chams Group and Funke AlomoOluwa, Managing Director of ChamsAccess, another subsidiary of Chams. Olaniyan is a resilient administrator with extensive hands-on experience in business development and management, she led the implementation of one of Chams’ most success-

ful public private partnership projects, deriving costs optimization for the partnering state government and in turn achieving increased earnings for the company. AlomoOluwa is also a seasoned business executive spanning over 19 years in both the Financial and ICT sector. She was the deputy project manager and chief installation officer of the bank verification number project. With a board filled with such experience and expertise earned through decades of cutting-edge innovation, Chams challenges the industry to do more for digital payment’s future.

KIAKIA

Real time access to capital KIAKIA IS A LICENSED, ENTIREly-onlineP lender that makes direct and peer-to-peer consumer and SME loans accessible and obtainable for underbanked and unbanked Nigerians without credit histories through its online proprietary credit scoring and risk assessment algorithm. Founded by Olajide Abiola in July 2016, the company recently introduced Mr. K, a chatbot based in artificial intelligence (AI) that provides automated customer service to anyone seeking to access credit on the site. E-PAYMENT REVIEW December 2017

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DNA OF SERVICE EXCELLENCE

clients with solutions and services that can be leveraged for business growth. In July, the company began deploying its single core and agent banking solution for almost 1000 microfinance banks (MFBs) in Nigeria as part of a project to effectively integrate them into the national payment system. Spending on IT and associated costs drain a significant portion of the operating expenses of the MFBs and this impacts their operational self-sufficiency. The deployment of the single core solution is therefore expected to help lower the operating costs of the MFBs, spur significant growth in the sector by improving the banks access to accurate and timely operational and financial reports needed for prompt decision making. When it comes to IT and payment solutions merchandizing, especially to those in financial services, Inlaks remains a strong and dominant player in Nigeria. The company

INLAKS

Orchestrating digital payment success and alignment

IN HIS TREATISE ON THE ESSENTIAL INGREDIENTS for financial inclusion, Matthew Gamser, the CEO of the SME Finance Forum states that financial inclusion needs to be combined with improving financial education and literacy. “We need to teach people how to understand and use the technology that is available to them...if we are going to build a superhighway, we need to teach people how to drive. We need to learn from the new drivers to improve the roads,” he writes. Inlaks is going to do that next year. As at last count, the financial technology solutions provider with operations in Nigeria and other sub-Saharan Africa countries, has received approval-in-principle from the Central Bank of Nigeria (CBN) to operate as a superagent in the nation’s financial services system. What this means is that Inlaks will deploy, operate and manage a robust, efficient and interoperable agency banking and mobile financial payment network with selected retail outlets operating as agents to provide financial services in local communities. But the question might be why is Inlaks, a company renowned for partnering equipment manufacturers in the technology industry to provide IT infrastructure and solutions to varied sectors of the economy, now in the business of financial inclusion? Here is a short answer. In 2015, the CBN issued the “Licensing Framework for Super Agents” to encourage other infrastructure providers and operators, including telcos, to provide shared agent network services. The expectation is that they would utilize their spread to expand financial inclusion touchpoints and extend digital financial services across the country. With the successful introduction and implementation of the cashless policy, which culminated in companies licensed as mobile money operators, the CBN attempted to meet the needs of the unbanked segment of the society with the introduction of agent banking. The idea was to provide limited scale banking and financial services to the underserved population, outside conventional bank branches, using non-bank retail agents and relying on technology, such as card readers, point-of–sale (POS) terminals or mobile phones for real time transaction processing. According to CBN guidelines, the system is aimed at enhancing financial inclusion, as banking agents are expected to act as delivery channels and to offer banking services in a cost effective manner. As a super agent (it is not the only one), Inlaks will deploy, operate and manage an efficient and interoperable agency banking and mobile financial payment networks, with selected retail outlets operating as agents. It will leverage the Nigerian Inter-Bank Settlement System (NIBSS) switching infrastructure to enable the inter-scheme “CashIn-Cash-Out” at approved locations and be responsible for managing and monitoring the activities of agents under its network. That is not all that Inlaks is doing. The pivot to financial inclusion is part of its rebranding strategy to serve more 40

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FEMI ADEOTI CEO of Inlaks Providing IT solutions to varied sectors of the economy

specializes in the deployment of scalable ICT and infrastructure solutions that satisfy the evolving requirements of different sectors of the economy including financial, industrial, distribution, telecommunication, utilities, oil and gas. It understands that market requirements evolve

LIFE.GUARDIAN.NG

and is constantly upgrading and developing products based on a thorough knowledge of the industries, economies and clients businesses. Its strategic partnerships with some of the leading technology companies in the world enables it to deliver high quality end-to-end solutions as well as the technology choice and flexibility that its customers want. Inlaks Computers provides innovative communication technology solutions that span data centre infrastructure, cloud computing, e-banking, banking applications, personal wealth management, power products and managed services. Its primary market is the financial services sector where its suite of software and hardware targets top priority banking with solutions that make a real difference. Backed by the strength of world’s leading banking software vendors and a strong relationship with ATM manufacturers and network service providers, the company delivers, high-performing solutions that are essential to retail banks’ for core processing, regulation and compliance, internet and mobile channels, and reporting. It offers an end-to-end installation and management of ATM network including procurement, data networking, commissioning and maintenance. Inlaks also deploys financial kiosks that it hopes will assist in the acceleration of the e-payment strategy of banks. “The last 35 years has been an interesting period for Inlaks by transiting from one business portfolio to another and still remaining relevant despite various economic challenges and disruption in information technology products and services,” Managing Director and Chief Executive Officer, African Operations, Inlaks, Femi Adeoti told ThisDay. “Inlaks has over the years been flexible and adaptable to the changes in these sectors by providing unique solutions to the needs of our customers towards achieving growth and stability.” Mid-year, Inlaks announced the formation of a partnership with risk management credit ratings research firm, Moody’s Analytics to provide clients of both firms with its award-winning regulatory and risk management solutions, which Inlaks will complement with its local business expertise and in-country support to Nigerian banks. Moody’s Analytics helps capital markets and risk management professionals worldwide respond to an evolving marketplace with confidence. The company offers unique tools and best practices for measuring and managing risk through expertise and experience in

RENMONEY

Your personal finance matters RENMONEY IS A BANK THAT PRIMARILY focuses on the development of consumer finance credit in Nigeria by providing simple money solutions targeted at the low-middle class. Operating under the license of a microfinance bank, tthe company has a functional platform which guarantees and ensures an efficient and scalable operational system, with a promise of 24-hour disbursement to a customer base of over 25,000. In August, it launched a school fees loans campaign, targeted at parents and guardians and partnered Smile to finance its subscribers.

JOSTPAY

Alternative way to generate virtual currencies JOSTPAY IS A DIGITAL PAYMENT SOLUTIONS company with expertise in virtual currency technology and payment gateway and connects users with its partners who make it possible to convert virtual currencies (Bitcoin, PM, Okpay, Payeer, Epay, etc.) to cash in any country. The services of Jostpay include Bitcoin wallet for sending and receiving Bitcoin; the exchange of virtual currencies to cash in any country in the world; the provision of payment gateways (APIs) for website owners to receive payments from MasterCard, Verve, Visa cards, Perfect Money in Nigeria and Bitcoin.

SOCIAL LENDER

Receive quick cash in three easy steps Social Lender is a social lending service developed by Lagos-based IT company, BinCom and targeted at Nigerian banks to allow them create a community where users can access soft loans based on their social reputation. It uses a proprietary algorithm to pull information from social media platforms about the user to generate a social reputation score. BinCom licenses the technology to banks with Sterling Bank the only known licensee. On the Sterling Bank social lender, you can borrow up to N10,000, a first time borrower gets only N3,000. Transaction charges range from 100 to 500 depending on how much the borrower is requesting.

VTNETWORK

Remittance in minutes VTNetwork allows individuals to transfer and receive money both locally through Western Union or on their phones. The firm also helps users to pay international/local merchants, send gift cards. VCASH is fully licensed by the CBN to serve both m-payment and e-payment needs in the Nigerian market place.

credit analysis, economic research, and financial risk management. Per the terms of the alliance, Moody’s Analytics will offer banks a range of expert solutions to help them make informed corporate lending decisions and meet evolving regulatory requirements. While the company already has a comprehensive footprint in Nigeria, its partnership with Inlaks will offer closer proximity to its local banking clients and support the further adoption of its “solutions in this important market.” “By using one flexible and secure platform that combines financial spreading, credit analysis, and robust data storage features, banks can better assess their counterparty risk profile as part of the lending decision process and gain a comprehensive and consistent view of their exposure,’’ Adeoti said in the statement announcing the collaboration. By forming such relationships Adeoti proves once again that he is a technology visionary and that growing businesses by driving engagement is his company’s raison d’etre. He is a strong communicator with a proven track record of business growth through deep customer engagement, built on vast understanding of business verticals. He possesses the ability to build on a foundation of existing assets/ resources to reignite innovation to drive growth. Adeoti has a record of deep industry experience spanning a period of about 20 years. An alumnus of the Harvard Business School, he also has an MBA in International Finance from the University of Liverpool and another MBA in marketing from the ESUT Business School. In addition, he has a first degree in electronics engineering from Awolowo University, and some certifications from the Lagos Business School in project and marketing management, among other trainings both local and offshore. Prior to Inlaks, he served as head of regional sales (West Africa) for Cisco Systems where he was responsible for establishing that company as the leading ICT organization in Africa. Adeoti started his career with the Nigeria National Petroleum Corporation (NNPC) and was also at a time with the Computer Warehouse Group where he delivered key IT Solutions to leading clients in the financial, oil and gas and telecoms segments. He also worked with Comtec Systems in New Jersey, USA where he implemented a strategic technology platform to drive global infrastructure. With someone like him creating customer centric products to deliver digital financial services to the unbanked, financial inclusion is about to witness significant boost. E-PAYMENT REVIEW December 2017

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Y E A R-E N D E D I T I O N

THE INTERCONNECT CLEARINGHOUSE MEDALLION COMMUNICATIONS

Modernizing telecom service in the Nigerian economy

IN TODAY’S TELECOMMUNICATIONS WORLD, FOCUS has shifted away from traditional telephone services to communications infrastructure services like high-speed Internet and systems that support consumers’ need to do more than just, well, communicate. Businesses in this sector have been in the throes of this change for over a decade now – constantly amping up their incumbent solutions to make their networks more versatile and more competitive. One company helping them do that is Medallion Communications, a foundational telecommunications servicing company dedicated to providing carrier neutral critical infrastructure for use by the industry. The truth is, over the years, a lot has changed in the computing form factor at the client end. They have evolved by orders of magnitude. They are so fast and plentiful that people are doing really cool things with them. When GSM telecommunications service was introduced to these climes, people just needed an easy connection so they can communicate. Phones were mere devices that aided calls and texts. Today, we have phones that are virtual computers; they are powered by apps designed to permit the user to perform a group of coordinated functions, tasks, or activities. Within these apps we have a growing breadth of vendors with offerings architected through to functionality that includes play, work, conversation and payment. Since its inception, Medallion has been bringing cutting-edge communications infrastructure solutions to help business and consumers navigate these changes. It provides high-performance, cost-efficient solutions that enable significant improvements in the capability of Nigeria’s telecommunications system. In light of telecom end-users dispersed needs, the company provides end to end solutions fit for a highly innovative and agile market sector that is driving change and disruption. Its intimate understanding of the technical mix, the security requirements the businesses skill set, future predicted needs and best practice design, build, operations and compliance ensure that the telecom sector (now mission-critical) runs with optimum availability, security and efficiency. Its services are critical to the business of all the operators in Nigeria who depend on bandwidth power to drive their business. Its growing customer base is made up of over 83 service providers, including long distance, international fiber network operators, and metro fiber transmission providers. These customers include all GSM, CDMA, fixed wireless and fixed line operators in Nigeria. Medallion is the hosting company of choice for the major value added service providers and premium rated operators and international companies seeking to do business in Nigeria. It has built technologically advanced and secure interconnect switching centres that enable the exchange of telecom traffic amongst these different operators. Its platform can handle varied traffic types including voice, data (SMS, email) and video. The infrastructure is robust and protocol independent and enables all classes of operators to interconnect seamlessly. It handles both TDM and IP based telecom operators as well as interface with major Internet exchange points to ensure that local content providers are adequately catered for. Also, it has built a 100% Nigerian colocation and hosting service platform

E-PAYMENT REVIEW December 2017

that is tailored to the specific needs of the local environment, while at the same time meeting all international standards required for the class of services it offers. This has attracted service provider types both foreign and domestic to have their infrastructure hosted within Medallion. While Nigeria has recently experienced an upsurge in companies appreciating the value of shared infrastructure and data centre service delivery, for over 12 years Medallion has been the backbone supporting Nigeria's ICT and telecommunications industry in the area of carrier neutral infrastructure sharing and connectivity. The Medallion colocation centers are today the most connected facilities in Nigeria. No other facility in Nigeria has the same number and concentration of all the international fiber operators in Nigeria. The list is endless: (Mainone, Glo1, SAT3, WACs, ACE, etc); long distance operators (Phase3, Multilinks-Telkom, MTN, Airtel, Globacom, etc); metro fiber operators (Broadbase, 21st Century, VDT, IPNX, Suburban, etc); critical national content operators (Nigerian Internet Exchange, Google, Nigerian Internet Registration Agency, VAS providers, etc); ISPs (Netcom Africa, Internet Solution, Vodacom, Layer3, Skyvision, etc). Medallion is the number one go-to facility for fast, efficient, and cost effective hosting and connectivity services when time to market and affordability is essential. Providing a service that customers can rely on is particularly important in the telecom and payment world. Medallion’s interconnect exchange and clearinghouse service offers to operators tremendous benefit in the areas of traffic, rates, enhanced earnings, settlement processing and payment, network availability and reduced legal and regulatory restrictions. With it, there is more capacity for operators to move their traffic; since they don’t have to build more links, operating costs are drastically reduced subsequently bringing down tariff rates substantially for subscribers. The network infrastructure includes switches, and accurate billing and mediation systems for interconnecting charges; it serves as independent source of traffic data as call data records are promptly given to the operators. It also guarantees timely and efficient payments. Medallion offers next generation switching network which is fault tolerant, reliable, and has multi-protocol capability. The company owes all this to the mind of Ikechukwu Nnamani, Chief Executive Officer (and E-Payment Review's Person of the Year). A multi-discipline specialist, Nnamani is knowledgeable in different fields of engineering, including oil and gas, power systems, manufacturing systems, and software development. In telecoms and information technology he is versed in IP/TDM telephony, GSM/CDMA technologies, and broadband systems deployment including triple play service delivery to subscribers utilizing fiber-to-the-home infrastructure. Following through on his carrier-neutral proposition, Nnamani’s agenda for 2017 was to build up a diverse ecosystem of network service points to ease the connection headaches face by service providers and their customers who want to connect cost-effectively and with confidence. “Our goal is to launch in four cities; presently, we are in Lagos and Abuja. So, we want to put infrastructure in Enugu, Port Harcourt, Kano and Ibadan. From all indications we may be adding Asaba to the plan,” said Nnamani when he led the company’s team on a courtesy call on the management of Communication Week Media in Lagos. “This will be bringing data centre and interconnect exchange points to meet the needs of service providers, similar to what we have done in Lagos.” The expansion of its capacity is being undertaken with one goal in mind: Responding with as much urgency as the company can muster to the needs of a customer base sorely in need of an upgrade. He understands that there is no better way to address those needs than to vastly enhance the capacity of the infrastructure within those aforementioned locations. However, growing the brand has a future plan tagged on as a driver. For its next act, Medallion Communications plans

KONGAPAY

Ecommerce secure payment option KONGAPAY IS A SAFE AND SECURE PAYMENT METHOD developed by e-commerce company, Konga in partnership with leading banks in Nigeria to ensure trust and safety for both buyers and sellers. Its purpose is to help customers pay for item easily on their website as it removes the process of entering your debit card information each time you buy anything from konga. To enjoy the service customers must have a bank account and a registered phone number.

PAYWITHCAPTURE

The app that replaces your bank PAYWITHCAPTURE IS POWERED BY ACCESS BANK. This mobile app is designed to make online and offline payments in diverse ways through users’ bank accounts and debit and credit cards. The company offers an array of advantages, such as money transfers from any bank card, savings clubs, titanium card, instant transfers to phone numbers, the opportunity to track expenses through PFM tool, and instant account opening. The recently updated PayWithCapture 5.0 comes with additional features that enable customers to transfer funds from any bank account (one or more) to any bank account or phone number and email addresses.

NAIRABOX

Full wallet on your mobile

SOFTWARE DEVELOPMENT COMPANY JORG TECHNOlogies launched Nairabox as a digital wallet and mobile application to enable users to buy airtime on the go, pay bills, donate to a charity and buy movies or event tickets from the comfort of their home or workplace. Nairabox marked its one year anniversary in February with the release a version nine update which included a feature for ordering food from restaurants or bukas and having it delivered. For every transaction done on the app, users get cash and loyalty points.

PAYSTACK

MEDALLION

IKE NNAMANI CEO of Medallion Communications A service critical to the business of operators who depend on bandwidth power

to list on the Nigerian Stock Exchange (NSE) possibly by 2022. Besides the prestige of having its stock publicly traded on a stock exchange, the move will create a heightened public profile for the company and attract to it the kind of universal respect it clearly deserves. Meanwhile veneration isn’t lacking. Medallion was honoured with the Interconnect Provider of the Year and the Telecom Solution Support Company of the Year awards at this year’s Nigeria Tech Innovation and Telecom Awards. Organisers said the double recognition was for the firm’s competitive edge over its contemporaries in the industry. “We are recognized as a market leader because we deliver proven solutions that drive results that exceed our clients’ expectations,” said Nnamani in a conversation with E-Payment Review. “These two recognitions highlight both implementation excellence and market position of Medallion as the trusted partner to help clients launch and monetize communications.” That adequately summarizes the value proposition of Medallion Communications - an interconnect clearinghouse built for progress.

Complete payments solution for your business PAYSTACK, FOUNDED BY SHOLA AKINLADE AND EZRA Olubi, is an “intelligent bridge” connecting merchants with payment processors. Merchants who sign up can beging receiving payments from customers within 30 minutes of integration. The product allows for recurring billing, thanks to its PCI-Compliant one-click and subscription payments infrastructure. "Paystack’s mission is to transform and overhaul the interaction between business and consumers, and to build a payments product for Africa to act as a catalyst for the continent’s online economy," said Olubi, Paystack co-founder and chief technology officer. The startup received a $1.3 million investment last year from numerous international investors and went on to launch a payment solution for global e-commerce platform Shopify, aimed at opening up the e-commerce market for thousands of Nigerian retailers. E-PAYMENT REVIEW December 2017

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AUTOGENIUS

The insurance fintech leader AutoGenius is an online and mobile distributed auto insurance platform offering both third-party and comprehensive insurance policies to Nigerians. It partnered AIICO Insurance and Taxify in June to launch “Taxify Cover” insurance to increase driver and riders safety and confidence in the ridesharing service. AutoGenius recently announced an insurance service on WhatsApp so people can buy insurance, receive certificates, renew vehicle documents, report claims, make enquiries, and chat with a dedicated insurance advisor.

ESL

The easiest way to accept card payments Electronic Settlement Limited (ESL) is a financial technology company that provides solutions to financial/payment problems in Nigeria and Africa. Its solutions include CashEnvoy – a payment gateway system that allows payments and money transfer online; PayPad – the first NIBSS certified mPOS provider in Nigeria, which enables merchants receive payments and earn additional income via the pairing of a smart phone; and an mPOS device. Websites that integrate with CashEnvoy can accept payment from all the major Nigerian debit cards, international Visa/Mastercard and from the CashEnvoy wallet.

ZEDVANCE

A bank in your pocket Zedvance is a consumer finance company that provides loans to individuals and groups. In partnership with retailers across Lagos, the company also offers POS finance for consumer goods and appliances. It also provides travel loans to people who wish to travel abroad for education or business.

FLUTTERWAVE

Secure and seamless payment solutions Flutterwave provides the underlying platform that allows businesses to make and accept payments anywhere in Africa. In just over a year since its launch, its technology has been responsible for processing over $1.2 billion dollars across 10 million transactions. Flutterwave's end-to-end payments solutions cover every aspect of the payments value chain from checkout and risk management to settlement. Headquartered in San Francisco with offices in Lagos, Nairobi, Accra and Johannesburg, the company is eliminating barriers to the digital economy for African consumers and businesses. It provides infrastructure and services to enable global merchants, payment service providers and Pan-African banks accept and process payments on any channel (Web, mobile, ATM and PoS). The company offers payment gateway API that allows merchants to accept payments, while users can pay via payments cards and mobile wallets like m-Pesa. As a PCI DSS certified company, it does everything to assure merchants and partners on its platform that their transactions and card data are secure. Its servers are compliant to the recommended safety standards which eliminate and reduce the risk of customers data being attacked or compromised. 44

E-PAYMENT REVIEW December 2017

BELIEF IN THE POWER OF SYNERGY PARKWAY PROJECTS

Innovating the digital finance experience

During the last E-Government Summit in Abuja, Parkway Projects partnered with organizers E-PPAN (E-Payment Providers Association of Nigeria) to host a breakfast session on the company’s work with Kaduna that contributed to the state being ranked number one in Nigeria for ease of doing business. Uzo Eziukwu, the company’s group CEO, made a presentation. In a calm, measured voice he explained how Parkway built a solution that enables easy online access for Kaduna residents to obtain businesses permits, vehicular registration, compliance processes, levies or fees payments and lots more across government ministries and agencies. The confirmed quality of the product and his slow, deliberate delivery illustrated a core professorial notion of why he is a fintech leader. The high quality of the company’s ideas and systems is reflected in the demand for its solutions and in the stature of its alumni, many of whom currently occupy positions of major importance in many multinational technology companies. Since inception to date, its team have remained the main driver of growth, without whom it would have been impossible to guarantee innovative solutions and quality of service to its partners/customers. Parkway Projects creatively match domestic business and market domain realities with a perspective on the global market place, taking into cognizance the expressed and implied requirements of its esteemed partners/clients. Relying on the strongest team of certified and experienced software developers, quality analysts and testers, systems integration & support engineers, business and technical analysts, and project managers, they are right there to cater for every business and retail banking segment. Parkway Projects is a leading financial technology provider creating modern banking experiences, proudly developed by Nigerians and delivered through Africa’s leading banks to businesses and individuals across the continent. Since incorporation in 2004, the firm has continually exhibited leadership in driving secure, robust, and user-friendly technology solutions across the continent. Over 3,000 government agencies, small and medium-sized enterprises

(SMEs) in conjunction with leading banks across 30 African countries use the company’s simple, intuitive, end-to-end corporate, retail and transaction banking solutions in multiple sectors of the economy. Included are corporates in mining and manufacturing, transportation and public utilities, trade, service, and construction. The firm, operating out of Nigeria’s prominent tech hub in Yaba, Lagos places great emphasis on quality, reliability and security for existing and new products/solutions. It does business in full compliance with international quality management systems standards, and has been certified under ISO 9001:2008 QMS; the first indigenous software development company in Nigeria to achieve this feat. Parkway Projects is licensed by the Central Bank of Nigeria (CBN) as a Payment Solution Service Provider and a Mobile Money operator. “There is a lot of attention given to the retail banking space, which has shown to quickly develop sophisticated retail banking solutions both for the banked and underbanked. At Parkway, we seek to bring this level of focus sophistication to the business banking space,” Said Chief Executive Officer, Emeka Onwuka. “This year, we have made a dent in the market with Bank3D and Cashflow, and further strengthening our conviction that there is a huge gap in the business banking space. In 2018, we intend to consolidate on these products by engaging more banks and SMEs. Our objective is to completely eliminate the use of cheque books and paper invoices.” Bank3D is a unified corporate internet banking platform that allows businesses to aggregate, monitor and make payments from any of their bank accounts in the country. Bank3D is a managed business banking hub with apps for large, mid-sized, small businesses and government agencies; their customers, vendors and employees; offered in partnership with Nigerian banks. It takes corporate banking a step further by connecting businesses with their vendors, employees and suppliers to ensure the entire financial value chain is visible to the business and its bankers. Businesses can manage their liquidity positions across banks by automating cash concentration and pooling. Bank3D as a platform, provides investment advisory to businesses by intelligently looking at their cash flow and allows third party applications to connect for electronic invoicing, payment advices and reporting. “The Bank3D service was developed in response to the increasing yearning of businesses and corporations in Nigeria for simple, integrated online banking solutions that connect the business to its bankers and value chain for seamless transaction banking on the go,” said Eziukwu, Last year, Skye Bank Plc, one of Nigeria’s leading commercial banks, signed an agreement with Parkway to deploy Bank3D to help Skye’s corporate customers monitor their accounts, pay vendors/suppliers and employees, as well as receive payments from customers/dealers, generate/send out electronic invoices and generally perform

business banking functions across all their bankers on the go. “Parkway has consistently demonstrated thought leadership and expertise in building innovative financial technologies for the industry over the past decade. We are proud to be the first to be fully activated on Parkway’s PSSP licensed shared platform,” said Mr Akinwale Ojo, Group Head, E-channels, Skye Bank. Such attestations dot the Parkway Projects

Cashflow can send out invoices to their customers, issue automated reminders, receive payments directly to their bank accounts, and manage receivables. Other products from Parkway include Bank Collect (used for corporate collections), netPAY (a web payment gateway) and ReadyCash. Bank Collect is a comprehensive revenue collections and receivables management solution that enables corporates

nesses of any size accept cards and mobile money payment. It’s easy to integrate APIs and quick turnaround set up time makes it an easy choice for merchants who want to accept online payments. ReadyCash is a CBN-licensed mobile payment service that provides individuals with a convenient way to create and manage electronic wallets (virtual accounts) where they can store money (mobile money) and execute transactions. In addition, customers can make payments for goods and services (utility bills, phone recharge, and merchant payments) from their mobile phone, anywhere within Nigeria. In his presentation at the E-Government Summit Eziukwu pointed out that micro, small and medium enterprises remain the engine room of most national economies but wasn’t functioning so well in Nigeria, something he blamed on factors like multiple taxation, regulatory and bureaucratic hurdles, epileptic power supply and poor transportation infrastructure. Parkway Projects, he said, has solutions that will offer empowerment, improved liquidity and access to finance for Nigerian SMEs. And it will reengineer government’s processes and help it offer the same quality of service as the private sector.

ETRANZACT

Paying directly from Your bank account made simpler ETRANZACT IS NIGERIA’S MULTI-APPLICATION and multi-channel electronic transaction switching and payment processing platform. eTranzact has operations in Nigeria, Ghana, Kenya, Zimbabwe, South Africa, Cote d’Ivoire, and UK and is currently expanding its business operations to other countries across the globe. Launched in September 2003, the company has products across all aspects of the e-payment space: ATM, Internet, POS, and Mobile. eTranzact has also deployed its mobile payment solutions to banks and other financial institutions alike. The CBN granted eTranzact the license to provide mobile money services to individuals with a special focus on the non-banking sector.

RELEAF

PARKWAY PROJECT

Buyers you need, from people you trust.

product landscape. Cashflow is Parkway’s electronic invoicing presentment and payment platform targeted primarily at SMEs. It aims at being an introductory service to SMEs structuring their businesses to help de-risk them for financial institutions. The solution provides basic accounting, electronic invoicing, customer and product management and cashflow forecasting. SMEs using

consolidate their customer orders, receivables and inflows leveraging bank channels and infrastructure. As an aggregation platform, BankCollect provides interfaces for collections on the internet, mobile, ATM and POS devices in over 50 government institutions and numerous businesses in about 30 African countries. On the other hand, netPAY enables busi-

RELEAF IS AN ONLINE MARKETPLACE THAT connects buyers and sellers of agribusinesses to trustworthy customers. Sellers register and indicate which commodities they want to sell, and are presented with a list of verified buyer contracts for those commodities. Releaf verifies the seller and allows the buyer to decide if they would like to discuss the contract. The company has about 300 active users, 100 connections and 600 companies on its platform. E-PAYMENT REVIEW December 2017

Neff Insight Y E A R-E N D E D I T I O N

SECURING THE INTERNET OF PAYMENT THINGS The boom in IoT devices and the billions of new wearables and smart devices is certainly going to bring an extra security challenges to digital payment processes. BY OLUSOLA O. OLODUDE

NEFF

CHANGE IS THE ONLY CONSTANT PHENOMenon in the whole wide world. About two decades ago, when the internet came to Nigeria, it seems to be the height of technological innovation. I remembered how excited I was seeing “Dear Olodude, Welcome to yahoo mail”. The internet to us then was the climax of all invention. The advent of the email services disrupted the old traditional letter writing and postage system. The internet continues to grow not just faster, but at the speed of light. The internet became a platform where every business leveraged on for the provision of convenient and affordable services to their customers. The internet platform became a great tool for various industries ranging from automobi le, military, government, education, and even religious associations. The financial industry did not lag behind in harnessing the strength of the internet. The internet brought about ease of doing business, seamless communication with consumers and thereby leading to customer's satisfaction. The internet gradually metamorphosed into Internet of things (loT) by moving from our PCs at home to our mobile phones and now to everything you can think about. “Yes, it is Internet of everyThing”. Leveraging on various connected devices, the world is gradually moving away from just internet of everything into Internet of Payment Things (loPT). Introduction The financial industry is highly dynamic and constantly leveraging on available technology to provide convenient services to its customers. The consumers always prefer a channel of comfort in making payments without feeling any discomfort whatsoever. Today, mobile platform has already disrupted what was seemly destructive payment system some years ago. With my mobile phone I can consummate almost all forms of banking services without having to visit the banking hall. The advent of the internet caused a major change in every sphere of life. The payment space was not left out. However, wearable devices as a means of payments are going to be the next evolution, and in the future, most of the devices that are going to be connected will also be able to make payment. At this stage, we would be moving beyond IoT to IoPT. Major manufacturer of branded smart watches today are embedding the latest payment technology that will enable such devices to make payment. Imagine your smart-watch tracking all items picked at the shopping mall and initiating payments with46

E-PAYMENT REVIEW December 2017

NEFF ANNUAL RETREAT IN IBADAN, OYO STATE. L-R: Musa Jimoh, Deputy Director, Banking & Payment System CBN; Uduak Udoh, Group Chief Internal Auditor, First Bank; Abudukareen Chukkol, Head, Cybersecurity Section, EFCC; Christabel Onyejekwe, Executive Director, Technology & Operations, NIBSS; Dipo Fatokun, Chairman, NEFF /Director, Banking and Payments Systems Department, CBN; An ED ,CBN; Adegbete Olaolu,Assistant Commissioner of Police; ACP Abiodun Aderoju-, President, ACAEBIN, Patterson Boleigha, Chief Conduct & Compliance Officer, Access Bank; Niyi Ajao, Executive Director, Business Development, NIBSS; Onajite Regha, CEO, E-PPAN; Ibrahim. I, Deputy Director, Consumer Protection Department.

out you having to wait in line - what an easy life.

The financial industry is highly dynamic and constantly leveraging on available technology to provide convenient services to its customers.

IoT: The Emerging Technology The Internet of Things (IoT) is the inter-networking of physical devices, buildings, household equipment and other items embedded with software, sensors, chips and network connectivity that enable those objects to collect and exchange data. IoT is the concept of simply connecting any device with a power button to the Internet and to each other. This includes everything from mobile phones, refrigerators, washing machines, headphones, lamps, wearable devices, cars and lots more. The emergence of IoT is changing the way we interact, the way we drive, how we make purchases and even how we seek medical attention. Sophisticated sensors and chips are embedded into physical things that surround us and each transmitting valuable data. The Internet of Things (IoT) is growing faster in our advanced technological world and providing a paradigm shift in the interaction of people. The world is about to experience a digital payment revolution which will be driven by these connected objects. There will be increased efficiency through connected objects and this will lead to the establishment of new business opportunities. Objects connectivity will lead to provision of new services and thereby opening up new payment models. Our planet is about to witness a new payment era, it shall be called

the “Internet of Payment Things.” (IoPT): The future payment This concept is called different types of names in various quarters. To some, it is IOT- enabled Payment, some call it Payments of Things while others calls it Internet of Commerce and “Internet of Payment Things”(IoPT). Regardless of the various names, the most important factor is that it leverages on connected objects for payment. With the development and onboarding of various devices to make payment on behalf of their owner, the world awaits the emergence of new business models. The new rule for the future is going to be “Anything that can be connected, will be connected” according to Jacob Morgan. This will definitely lead to the complete digitalization and transformation of the financial system. It will also change the consumer's interaction within the payment space. Bank customers will key into the digital payment and there will be a shift in spending pattern. Payment of things will create a new layer of an economy driven by the usage of recurring bills, pay-as-you- go subscription model and would also increase online transactions. Consumers will make payment with minimal stress and friction. We would see introductions of different devices with different payment schemes. Device can place order for replenishing services when in need of some items. Imagine your refrigerator in

Adebayo Adelabu, Deputy Governor, Operations, Central Bank of Nigeria (CBN).

Dipo Fatokun, Chairman, NEFF /Director, Banking and Payments Systems Department, CBN

Onajite Regha, Executive Secretary/CEO E-Payment Providers Association of Nigeria (E-PPAN).

Attendees pose for a group photograph on the first day of the retreat.

Onajite Regha, CEO, E-PPAN, Dipo Fatokiun and Babatunde Ajiboye, secretary of NeFF.

Babatunde Olaleke , left, and Adesakin Folasayo, staff of E-PPAN, organizers of the retreat.

the living room stocks up items that is running out. Connected car will be able to pay toll fee, parking fees or perhaps pay for fuel refill at filling stations. Smart tag on your luggage could pay for baggage fees at the airport. You have exhausted your electricity credits but your prepaid meter is able to make credit purchase for your flat. Smart devices would maintain and service their own contract by themselves. Would you like to have a smart car that would pay its insurance premium as at when due? Assuming you have a smart printer with replenishment services, you can push a button on the device to order for a new ink or toner. The payment is consummated using your online payment method, hence you do not need to log on to your internet banking, mobile platform or even place an order via online shopping portal. However, the printer can also contain onboarding sensors that flag when the device is running out of ink. Using the available or preset data, the device could, by itself, place an order for another ink. Here, it is the device that initiates the transactions autonomously. This could be applied to different household devices. Your IoPT-powered decoder can independently initiate your subscription payment before the due date, hence you do not need to bother yourself about when the subscription will expire. The IOT is expected to improve customer service experience and provide competitive advantage with

convenient banking systems. Securing the “Payment” in (loPT) Every technological revolution comes with its own challenges. There are serious security implications on the use of IoPT. Security becomes critical since we shall be entrusting our bank accounts to our connected smart objects with the ability to make payments on our behalf. Today, most devices are vulnerable to different threats with sophisticated breaches occurring in cyber-attacks. loPT will definitely open a new phenomenon in the space of cyber security. Unprotected device on this platform will be attacked. Attackers would take control, steal information and disrupt connected services. There will be identity issues here, hence there is need for not just the authentication of connected devices but also for the authentication of the user/ owner too. Consumers must establish limits on the transactions the device can initiate, in terms of volume, frequency, or amount. The manufacturer of these devices must also ensure high-level embedded security as any serious security breaches could lead to reputational loss. Besides, some of these devices are likely to be biometric enabled and the industry would need to start planning on how to solve device identity issue and reduced new arrays of fraud models due to IoPT. The digital identity security is crucial here. The authentication, validation and access control of these devices will be made possible

Manufacturers of these devices must also ensure high-level embedded security as any serious security breaches could lead to reputational loss.

with the introduction of biometric features such as fingerprints, facial, iris or voice recognition. Perhaps, we might be authenticating payment instructions with the scan of our iris. Today, the financial industry has done very well by ensuring accurate identity of human customers with the implementation of Bank Verification Number (BVN). However, we may be heading for another phase of that project but this time for connected devices. Companies and organizations will experience more and new form of security threat. The issue of privacy and data sharing will be key discussion. Organizations are going to be faced with huge volume of data generated as a result of these connected devices. Organizations must ensure compliance with standards in storing, tracking, analyzing massive data that will be generated. This future payment scheme will also change the face of electronic fraud pattern. Fraud will migrate to IoT in its full capacity. The implication of this is that fraud desks across the industry must scale up by connecting together - maybe we may have Internet of Frauddesks (loF) - just thinking. Anti-fraud monitoring infrastructure must take into consideration IoT and integrate digital payment into its operations. Human identity with relation to device identify will be the new order for fraud desks in the industry. Conclusion The security of any payment infrastructure is very critical no matter how small or insignificant. To avoid “Internet of Insecure Things”, the financial industry must, be prepared to ensure the security of these connected devices. Olushola is the Head of Fraud Management Unit at the Nigeria InterBank Settlement System Plc (NIBSS)

Culled from 2016 NeFF annual report. E-PAYMENT REVIEW December 2017

The Risk Report Y E A R-E N D E D I T I O N FUTURE READY ENCRYPTION OnlyKey is a physical device that offers two-factor authentication and password solution, that can be used to enter a computer's password to unlock it and to store and enter the password for any software or website. NUMBERS

$1.6 trillion

Projected value of Cloudbased biometric transactions annually from about 5.5 billion devices by 2020, according to forecasts by Acuity Market Intelligence.

$96.3 billion

Phishing found to be far deadlier than data breaches

KICKSTARTER / TRENDHUNTER

THE RESULTS OF A YEAR-LONG INVEStigation into Gmail account hijacking has shown that while data breaches are bad news for internet users, phishing is a much more dangerous threat to its users. The Google commissioned study finds that victims of phishing are 400 times more likely to have their account hijacked than a random Google user, a figure that falls to 10 times for victims of a data breach. The difference is due to the type of information that so-called phishing kits collect. Phishing kits contain prepackaged fake login pages for sites such as Gmail, Yahoo, Hotmail, and online banking. They are often uploaded to compromised websites,

THE 'AKITA' IOT SECURITY device has been created with smart homes in mind to ensure that they are never at risk of attack or invasion by unauthorized parties. It works by constantly scanning your network and automatically shutting down unusual activity thanks to militarygrade security protection. Machine learning and behavioral analysis work to help the device learn your 48

and automatically email captured credentials to the attacker's account. The study found that 41 percent of phishing kit users are from Nigeria based on the geolocation of the last sign-in to a Gmail account used to receive stolen credentials. The next biggest group is US phishing-kit users, who account for 11 percent. The researchers found that 72 percent of the phishing kits use a Gmail account to send captured credentials to the attacker. By comparison, only 6.8 percent used Yahoo. Gmail users were also the largest group of phishing victims, accounting for 27 percent of the total in the study. Yahoo phishing victims follow at 12 percent.

Gartner's estimate of global enterprise security spending in 2018, an eight percent increase from 2017.

160 million Number of fingerprint embedded payment cards shipments by 2022.

53%

Percentage of organizations citing security risks as the number one driver for overall security spending, according to Gartner. A higher number said that a security breach is their main security spending influence.

Fileless attacks to surge in 2017 FILELESS ATTACKS are on the rise and are predicted to comprise 35 percent of all attacks next year, according to the Ponemon Institute. A survey by Barkly and the Ponemon Institute suggests that this method of cyberattack is becoming more popular -- and traditional antivirus solutions are doing little to stop the trend. After surveying 665 IT security professionals in the enterprise, the organizations discovered that faith in traditional file-scanning and antivirus software has become ashes in the wake of new, more innovative methods of compromising PCs and computer networks. "We are in the midst of a significant shift in endpoint security," Barkly and Ponemon said in the report. "The majority of organizations are replacing or augmenting these solutions with new security tools designed to stop fileless attacks, though many remain skeptical such attacks can be stopped at all." Fileless attacks dismiss traditional methods of compromise, such as downloading and executing malicious files on a victim's system, as they can be detected by security solutions. Instead, these attacks leverage exploits or launch scripts from memory, which can infect endpoints without leaving a trail behind.

SWIFT warns hackers are raising their game

routine to know what your unique activity looks like in comparison to potential threats.

E-PAYMENT REVIEW December 2017

THE SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATION (SWIFT) has warned banks that cybercriminals are getting more sophisticated and that the risk of digital heist is on the upswing. The Brussels-based inter-bank messaging system has been actively encouraging banks to increase their security to stave off risks of hacks. “Adversaries have advanced their knowledge,” SWIFT said in a 16-page report co-written with BAE Systems cyber security division. “No system can be assumed to be totally infallible, or immune to attack.” SWIFT, in its warnings, demurred on giving more specific information such as the number of attacks, who the victims have been or, say, how much money has been stolen. But even minus official disclosure, the details on many hacks and attempted hacks have made their way to public consciousness. Far Eastern International bank, for example, reportedly lost $500,000 in a cyber heist led by a North Korean hacking group known as Lazarus, same group suspected of stealing $81 million from the Central Bank of Bangladesh in February 2016.

Android phones track your location for Google GOOGLE HAS BEEN COLLECTING ANDROID PHONES' LOCATIONS EVEN WHEN LOCATION SERVICES are turned off, an investigation has revealed. Online publication Quartz observed that Android phones collect the addresses of nearby mobile phone masts and send them to Google. The details were collected even when location services were turned off on the phone, no apps had been installed and there was no SIM card in the phone. "The result is that Google, the unit of Alphabet behind Android, has access to data about individuals' locations and their movements that go far beyond a reasonable consumer expectation of privacy," wrote Quartz reporter Keith Collins. Google confirmed that it was collecting the information, which it refers to as Cell ID codes, but said it was immediately discarded. "In January of this year, we began looking into using Cell ID codes as an additional signal to further improve the speed and performance of message delivery. However, we never incorporated Cell ID into our network sync system, so that data was immediately discarded, and we updated it to no longer request Cell ID," a Google spokesman said in a statement.

KEEPING BITCOINS SECURE IS A MUST At first glance, people could mistake HooFoo as a stylish minted coin that anyone could carry around in their own wallet. But upon closer inspection, this tiny waterproof coin is actually jam-packed with the world's most secure crypto chip, a fingerprint/facial authentication system, and a 4.0 bluetooth connection to pair up with iPhone 10. Hoofoo is the most gamechanging device ever invented for the cryptocurrency world. It is a hack-proof hardware wallet that pairs up with smartphone

THREAT LEVEL ICEDID // A new banking Trojan that does not seem to have borrowed code from other similar threats, has entered the financial cybercrime arena. IcedID was first spotted in the wild in September 2017, and it currently targets banks, payment card providers, mobile services providers, payroll, webmail, and ecommerce sites. “To orchestrate web injection attacks for each targeted bank site, IcedID’s operators have a dedicated, web-based remote panel accessible with a username and password combination,” IBM X-Force researchers found. POISON MALWARE // Cyber crooks are using a clever approach to deliver banking malware to the right victims: they are poisoning the search results for specific banking-related keywords. Users who follow the malicious links are redirected via JavaScript through a number of compromised, intermediary sites, to the final one that serves a malicious Word document. When victims open the file, they are prompted to “Enable Editing” which in turn triggers the execution of a malicious macro, which downloads and executes a variant of the Zeus Panda banking Trojan.

INDIEGOGO / IBLAGH / MASTERCARD / NFCWORLD

High-speed quantum encryption holds future of cybersecurity INITIALLY CONSIDERED A THREAT TO TODAY’S encryption methods, quantum systems might hold the key to keeping computers and the internet secure, thanks to quantum cryptography. Researchers from Duke University, Ohio State University, and Oak Ridge National Laboratory writing in the journal Science Advances demonstrated a system that uses quantum key distribution (QKD) to create and distribute encryption codes at megabit-per-second rates. The secret lies in putting more information on the photons light particles used in QKD and in most of today’s quantum networks - and combining it with high-speed detectors. This was achieved by adjusting the moment when photons are released, making it possible to encode two bits of information on a photon instead of just one. As a result, their system can transmit keys five to ten times faster than current methods, which only allow for between tens to hundreds of kilobits per second. Running several systems that use their new method in parallel creates current internet speeds. QKD requires a set of encryption keys sent separately from the encrypted message. In principle, the information becomes “hack-proof,” because tampering with the message or the encryption key would alert both the receiver and the sender. However, QKD cannot work flawlessly, because it requires equipment that is still imperfect. Though it is because this new system used equipment that’s mostly commercially available, that would make it easy to be integrated into the current framework of the internet.

China to embed eIDs in SIM cards

CHINA IS PLANNING TO embed personal identity information into SIM cards to better protect citizens’ private information, according to the country’s Ministry of Public Security (MPS)… When making transactions with SIM eIDs, citizens will no longer need to provide personal information, such as their names, address, phone number, and ID number, because online platforms will be able to verify the authenticity and validity of the eID.

Mastercard eyes AR for shopping

MASTERCARD UNVEILED an augmented reality shopping experience today that for the first time incorporates Masterpass and Identity Check Mobile with iris authentication for safe and seamless payments. This new AR will let shoppers view digital representations of products learn more about what they are buying, see additional options and can pay for items using Masterpass, which will first authenticate the user’s iris.

Okey button authenticator

BEIJING-BASED OKEY CO has developed a “universal digital key” that keeps payments and other secure credentials away from users' mobile phones. It combines NFC capabilities, contactless card emulation, user authentication and Bluetooth pairing in a compact fob that offers a wide range of potential use cases and business models, from payments to access control, transit ticketing, loyalty rewards and more.

E-PAYMENT REVIEW December 2017

Fraud Conference Y E A R-E N D E D I T I O N

A Deeper Dive: Using big data to prevent fraud BY LUCY AKOKOTU THERE ARE HARDLY ANY LEGENDS IN PAYMENT, MUCH OF WHAT we have is fact. One of the known facts is that cybercrime is doing everything to sour the sweet taste of electronic payment for everybody. The digitalization of payment is being challenged by fraud methods that are becoming more sophisticated as the techniques to combat them try to evolve. As financial institutions are investing on preventing and combating fraudulent attacks, the extent and nature of fraud itself continues to change. While eliminating financial frauds is not a practical goal, there is a need to evolve the ways attacks are dealt with. Experts at the eight annual payment system and fraud conference, organized by Electronic Payment Providers Association of Nigeria (E-PPAN) in November, suggested the financial institutions should look towards investing in big data analytics to address the problem. The conference, usually an opportunity for industry stakeholders to discuss methods for thwarting the growing cybersecurity threat, saw attendees from industries such as banking and finance, telecommunications, judiciary, government, law enforcement, healthcare, fintech, retail, SMEs to discuss this yearâ&#x20AC;&#x2122;s theme: Leveraging Big Data Analytics in Combating Payment Fraud. The varied attendance is because fraud has become a multi-industry problem. Banking and payment are the ones that most frequently come to mind for the average person but due to the fact that digital payment has also become a massive, complex system with many facets -- banks, card companies, lenders, managed services, payment processors -- it is now difficult to name an industry impervious to fraud. Clearly, considering recent developments, the fraud fighting paradigm needs to change. And it needs to change now. The conference projected that the industry could lose N6 trillion to electronic fraud by 2021 if nothing is done to frustrate the fraudsters. Country Manager of Accenture Nigeria, Niyi Yusuf, in a presentation revealed that about N237 billion would be at risk, if adequate measures were not taken to address electronic fraud in the country. He showed how the rate of attacks is on the rise with 20 per cent of fraud acts carried out across counters while 80 per cent is carried out among various electronic channels provided by the banks for customersâ&#x20AC;&#x2122; convenience. Yusuf pointed out that banks and their regulator, the Central Bank of Nigeria (CBN) have put certain measures in place to address the issue of fraud, such as the separation of duties for bank employees with the makerchecker rule, the introduction of the Bank Verification Number (BVN), and the signing of the cybercrime law by the federal government in 2015. But these actions, he said, have proven inadequate given that we see fraud being perpetrated in a new manner every day. He advised the banks to invest in big data analytics to enable them monitor the behavioral patterns of genuine bank account owners, in order to checkmate fraud before it occurs. He also urged them to continually upgrade the skills set of their staff to suit the growing automation and digital technology that are essential for the banks continually changing business priorities and the fight against fraud. The above advice bears within it the truth that current fraud prevention efforts are primarily spurred by reactive investigations and no true engagement in proactive fraud monitoring. With billions (or more) at risk at the click of a button, financial services providers have a clear incentive to use data analytics to detect cross-channel anomalies that could suggest fraud. While fraud itself is prevalent everywhere, its identification is not simple. That is because there are two types of fraud schemes: known and unknown. The known ones are easier to identify because their scenarios have been seen in the past. The unknown fraud schemes are where the problems lie because they can continue for years without detection until they are uncovered in an investigation or from a deep dive into accounting variances. These are the sinister schemes one canâ&#x20AC;&#x2122;t even imagine are happening because no one knows to look for them. Big data analyst, cloud computing expert and IT consultant to Dell-EMC, Ositadimma Ugwu, said the fraudsters have become sophisticated in their 50

E-PAYMENT REVIEW December 2017

Mohammed Suleyman Director, Financial System Strategy (Fss2020), and Mavi Isibor, Group Chief Executive Officer, Poise Nigeria.

M.D Suleyman Director, Fss2020), and Mavi Isibor, Group CEO, Poise Nigeria; Kemi Okusanya, Country Director, VISA; Engr. Aliyu Aziz, DG,NIMC; DIG H.M Dagala.

Cross Section of Participants

approach, and could come from different electronic channels to perpetrate their acts, insisting that digging into big data is the sure way to address the high level financial fraud in the Nigerian financial space. He explained that the use of big data analytics will help banking institutions understand activity patterns among their own customers and to uncover previously undetectable patterns that can be built into rules-engines. It will enable them to predict attacks, based on trends that are targeting the industry as well as enhance their abilities to detect cross-channel schemes. Using big data to track such factors as how often a user typically accesses an account from a mobile device or PC, how quickly the user types in a username and password, and the geographic location from which the user most often accesses an account can substantially improve fraud detection, Ugwu said. Dele Adeyinka, chairman of the Committee of e-Business Industry Heads (CeBIH) urged financial institutions to start their deeper-dive knowledge into fraud detection with the data they currently have. He said Nigeria currently has over 30 million BVN card holders, recording over 4.6 trillion transactions with their debit and credit cards, and about 40 trillion transactions annually, using different channels. If banks could go into this transaction data, they

Mohammed Suleyman Director, Financial System Strategy (Fss2020), and Mavi Isibor, Group Chief Executive Officer, Poise Nigeria.

Dr. Segun Aina,Chairman, Global Council-Global Banking Educations Standards Board; and Tunde Lemo(OFR), Trustee member, E-PPAN

Mohammed Suleyman Director, Financial System Strategy (Fss2020), and Mavi Isibor, Group Chief Executive Officer, Poise Nigeria.

Niyi Yusuf, Country Manager of Accenture, Nigeria

Femi Fadairo, NIBSS; Regha, Engr. Aziz, Kemi Okusanya, and Samson Dada, Data Analystics leader, Deloitte.

can see what is up with fraud and can create new analytic approaches to mitigate it. But the potential value of the aforementioned data for the banking and payment industry could face an intricate and costlier challenge that could haunt the push for data analytics. A challenge that often makes such initiatives impossible: data silos. Why it is true that the industry generates a lot of valuable data, getting access to it is often the hardest part. The way each financial institutions maintains its own isolated data island is counter-productive and detrimental to the antifraud goals of the industry. Silos restrict clarity of vision across the entire payment ecosystem, breeding mini empires where the banks fail to collaborate, share information and work together. Participants agreed that having one giant ‘data-lake’ for the integration of data from various stakeholders is imperative for the successful use of big data analytics. The bottom line is that every organization needs to ensure that their data and information is transparent and understood and that there are processes, guidelines and often technologies in place to help the industry share data effectively together. For instance, they argued that collaboration between data power-houses like NIMC and NIBSS to conjoin the BVN and

NIN for identity management will go a long way to enhance fraud investigations. As cybercrime is not restricted by geographical location, Onajite Regha, Executive Secretary and Chief Executive Officer of E-PPAN in comments to the conference called for an inter-relationship between national and international law enforcement agencies, which she said would improve the speed of investigations. H.M Dagala, Deputy Inspector General of the Force Criminal Investigation Intelligence, Nigeria Police supported the call adding that fraud is no longer an issue for the payment industry alone but one which weighs on a gamut of sectors. “There is really no reason for us not to collaborate as fraudsters are collaborating in defrauding people. If they can do this, then we need to come together to do more. But for the police to play their part, they need information,” he said Bottomline: it is in the interest of industry regulators and stakeholders to brace up to a new and proactive approach of fighting fraud using big data analytics capabilities. Industry stakeholders should pool resources in terms of data storage and shared intelligence in their effort to disrupt criminal activity in the payment space. E-PAYMENT REVIEW December 2017

Next Up Y E A R-E N D E D I T I O N

Awesome inventions of 2017 one

three

BRAIN COMPUTER INTERFACE

DEVICE THAT CAN READ YOUR MIND SCIENTISTS AT JAPAN'S TOYohashi University of Technology developed this device that reads people's minds. An electroencephalogram (EEG) was used to monitor people’s brain waves while they spoke, which were then matched to the syllables and numbers using machine learning. The breakthrough could one-day help handicapped people who struggle to speak and could be used as a 'telepathic typewriter' to automatically note down what we are thinking.

SEVEN / PORTABLE GAMING

DEVICE TEACHES CHILDREN TO CODE UK TECH START-UP CURIOUS CHIP has created a handheld gaming device that teaches children to code their own games and apps. The Pip, which is currently being funded via a Kickstarter campaign is designed to help novices get to grips with the basics of coding. It allows users to programme games and apps in multiple coding languages – including Javascript, HTML and Python.

two DIAGNOSIS KIT FROM AFRICA

OWLSTONEMEDICAL/AFP/DEZEEN /AFP/FUTURISM/EMBER / TIME

SMART JACKET TO FIGHT AGAINST PNEUMONIA ENGINEERS OLIVIA KOBURONgo, Brian Turyabagye and a team of Ugandan doctors came up with this biomedical smart jacket that can detect pneumonia very fast. Called “Mamaope“, or “Mother’s Hope,” the jacket can diagnose pneumonia up to three times faster than a doctor and reduces human error, according to studies done by the inventors. When slipped on a child, its sensors pick up sound patterns from the lungs, temperature and breathing rate, which are sent to a mobile phone app (via Bluetooth) that analyses the information in comparison to known data to get an estimate of the strength of the disease.

EIGHT /AUGMENTED REALITY

EXPANDING CLOTHING

Petit Pli fits kids as they grow THIS KIDS' CLOTHING LINE DESIGNED BY ROYAL COLLEGE of Art graduate Ryan Mario Yasin has a pleat system that lets garments stretch to fit even after growth spurts. Using his background as an aeronautical engineer, he devised a set of permanent folds that let clothes "unpack" when pulled, so they stretch over children as they get bigger. "The structure deforms with the movement of the child, expanding and contracting in synchrony with their motion," he said.

SNIFFING OUT DISEASE

BILLY BOYLE, CEO OF A UK-based diagnostics company was awarded this year's Royal Academy of Engineering’s prestigious Silver Medal for inventing this ‘breathalyser’ that can collect a simple breath sample and detect volatile biomarkers for diseases, including cancer, on a patient’s breath. E-PAYMENT REVIEW December 2017

THIS CLINICALLY-VALIDATED AND patented engineering breakthrough allows the visually impaired to see in the same manner that sighted people do. With eSight 3, those who are legally blind or are living with low vision can engage in many professional, academic, or personal activities the way the sighted can.

four

BREATH BIOPSY

GLASSES FOR THE LEGALLY BLIND

five / A WRISTBAND FOR menopausal women, which is designed to regulate and alleviate hot flushes.

six / A SKIN-HEALING MASK exhibited at the China-Ukraine Scientific Exhibition.

SEVEN / INTELLIGENT MUG

DRINK AT PERFECT TEMPERATURE EMBER, A DESIGN-LED TEMPERAture control brand, coated sturdy stainless steel in white ceramic to make this mug which keeps coffee hot. Paired with the Ember app, you can choose the perfect temperature for your coffee. It uses built-in micro-processor, phase change cooling system, and network of sensors to maintain the temperature.

ROBOCOP

China's new police station won't have humans CHINA ANNOUNCED PLANS TO OPEN an unmanned police station powered by artificial intelligence (AI) in Wuhan, one of its capital cities. The AI police station will likely focus on vehicle- and driver-related issues, which makes it more analogous to an American Department of Motor Vehicles (DMV) than a precinct (sorry, Robocop), but the decision to build it is still right in line with China’s plans to be a world leader in AI by 2030. According to a report from the Chinese financial paper Caijing Neican, the futuristic station will offer simulated driver examinations and provide registration services. Cutting-edge facial-recognition technology developed by Tencent will identify citizens within the station. The idea is that this will eliminate the need for users to sit at stations for long periods of time, sign up for accounts, or download apps — the AI will access all pertinent information as soon as it sees the person’s face. STARTUP MIGRATION

Japan eyes visa programme to lure foreign businesses

TAKAO SOMEYA GROUP, UNIVERSITY OF TOKYO / UNIVERSITY OF WASHINGTON

HOPING TO CREATE COMPETITION FOR talent among localities to breathe new life into the economy, Japan is launching a one-year startup visa program as early as fiscal 2018 in a bid to attract foreign entrepreneurs. Under the programme, foreign entrepreneurs will have 12 months to live and work anywhere in Japan, as long as they submit a business plan demonstrating their ability to open a business office in the country and secure funding. The current startup visa system is only available in "special zones" including Fukuoka City and Tokyo, and places similar requirements on foreign entrepreneurs in order to receive approval for a six-month "business manager" residential status.

GLOBAL SUSTAINABILITY ASSESSMENT SYSTEM Modified shipping containers are being used to construct Fenwick Iribarren Architects' Ras Abu Aboud stadium in Doha for the controversial 2022 FIFA World Cup inQatar. The Spanish architecture practice's modular design means the stadium can be dismantled and moved to a new location after the football tournament. Repurposed steel containers will be arranged in an "elegant curved square" and each will be modified to contain elements of the 40,000-seat stadium, including removable seats, concession stands and bathrooms. WORKPLACE AUTOMATION

Workers don't fear coming robot invasion A NEW SURVEY HAS SHOWN WORKERS MAY not be as concerned about automation as they should be. Data from ZipRecruiter shows 60% of job seekers believe fears around robots taking away jobs are overhyped while 2 in 5 employees believe their current job will be automated within their lifetime. That is a stark contrast to a number of reports touting the growing likelihood of massive job displacement due to automation. A recent McKinsey & Co. report concludes that 800 million jobs could be lost to automation globally by 2030, including between 39 and 73 million in the U.S., perhaps as much as a third of the workforce. Another report released by Redwood Software and Sapio Research found that 60 percent of businesses will be impacted in some way by automation by 2022. It is wise to take all such findings with a grain of salt. There's been wide discrepancy in the level of alarmism, in large part because predicting how paradigm-shifting technology will affect the future is at best a guessing game. Even the McKinsey report

makes it clear that technology will open up new opportunities even as it replaces old ones. But it is noteworthy that with so many alarms being raised, those surveyed do not seem as worried about automation as many in the tech sector. The authors of the report conclude that workers may not be up to speed on the monumental shifts underway. "Job seekers don't fully understand automation and the risks that accompany it," according to a ZipRecruiter spokesperson: While most job seekers have heard of the term "job automation" (77%), less than 1 in 3 (30%) have an actual understanding of the term saying they are very familiar with it. The implication isn't great. Regardless of how large the impact of automation will be on specific industries, there's little question upheaval is coming. Those who prepare by attempting to understand how technology will affect their industry and career will best be able to handle it. Unfortunately, according to this survey, a whole bunch of people stand to be blindsided.

In brief -- Technology

WITH OVER $3.5 BILLION in energy infrastructure investment and 3 gigawatts in total solar and wind capacity, Google is off-setting 100% of its energy usage with either wind or solar power.

LAMBORGHINI HAS collaborated with a group of researchers from MIT to create a conceptual electric sports car, which has a carbon fibre shell that is able to repair any cracks or damages by itself.

NEW SMART WINDOW technology, developed by the National Renewable Energy Laboratory in the US, can keep heat out of buildings, as well as serve as a solar panel that converts sunlight into energy.

AUSTRIAN DESIGNER Klemens Shillinger made this phone-shaped block of plastic with stones in its face that smartphone addicts can “swipe” across to help them break free from their phone habits.

DUTCH TOILET STARTup, Mr.Friendly, designed a smart urinal that shows ads on screens above the urinal. It has built-in sensors that roll the ads once it detects someone is using the urinal.

E-PAYMENT REVIEW December 2017

NIBSS Fraud Report Y E A R-E N D E D I T I O N

Industry Fraud Report, Third Quarter 2017

Although, POS fraud volume increased by 37% this quarter, the channel experienced 37% and 45% decline in the attempted and actual loss value respectively when compared to Q2 2017.ed to the actual loss figure being over N36m, an increase of 195% when compared to Q1. Fraud volume also increased from 146 in Q1 to 193 in Q2.

DMBs Q3 2017 Fraud Summary

Unlike Q2, the internet banking saw a remarkable decrease in both volume and actual loss value when compared to last quarter. The channel recorded only 20% loss out of the attempted value of N26.5M. The value represents 75% decrease from last quarter’s attempted fraud.

INTERNET BANKING -- Volume - 328, Value - N5.4 million

Fraud volume The 3rd quarter’s fraud volume of 5,852 depicts a 5.8 % decrease and 37.8% increase when compared to Q2, 2017 and Q3, 2016 respectively. Out of the 5852 fraud count for this quarter, we recorded 2,507 as the count for complete or partial loss in volume. Looking at both the fraud volume and actual loss value, we see that the industry was able to salvage completely about 57% of the fraud volume. This could indicate increased collaboration as well as more measures employed by stakeholders.

5,852 4,548

Individual Accounts

Fraud Volume

2,507 Actual loss Count Volume

Q3 2017 Vs Q2 2017 Comparison

Corporate Accounts Q2 2017 Vs Q2 2016 Comparison

5.8% 37.8% decrease

increase

Attempted Fraud

N936 million

Q3 2017 Vs Q3 2016 Comparison

Q3 2017 Vs Q2 2017 Comparison

18% 14.3% decrease

increase

Actual Loss Value

N936 million

Q3 2017 Vs Q2 2017 Comparison

19%

Q3 2017 Vs Q3 2016 Comparison

increase

13% decrease

WEB -- Volume - 1,524, Value - N35 million

Amongst a few other channels, Web experienced a remarkable increase in fraud count from 1,185 in Q2 to 1,524 in Q3. With about 14% decrease in its actual loss amount when compared with Q2, Web accounts for 26% of the total fraud volume for Q3.

CHEQUE -- Volume - 2, Value - N3.7 million

The channel decreased from a count of 5 in Q2 to 2 in Q3. Cheque losses N3.7M which represents a decrease of 73% and an increase of 270% when compared to Q2 2017 and Q3 2016 respectively.

E-COMMERCE -- Volume - 311, Value - N26.5 million

Fraud volume and value for e- commerce increased drastically when compared to Q2 2017 and Q3 2016. E-commerce makes up 6.5% of the entire actual loss value for Q3.

ACROSS THE COUNTER -- Volume - 63, Value - N54m million

With almost the same fraud volume, the channel recorded 205% increase in attempted fraud value and a decrease of 48% in the actual loss when compared to Q2. Across the counter represents 13% of the overall actual loss values.

SUMMARY

ATM and Mobile once again emerged as top two in terms of fraud volume and value. We will yet attribute this to several emerging value-added services on these channels, sim swap issues and social engineering tactics - compromised details by customers, which when gotten; can be used in transferring funds before eventually being withdrawn via ATM. Overall, we observed lower losses despite heightened fraud attempts which may cite joint efforts within the industry. To re-iterate, continued efforts and more aggressive collaborations within the industry will be instrumental in curbing this menace called fraud.

Fraud by day Fraud Volume Comparison by Day (Q3 vs. Q2 2017)

Note: Attempted fraud valueincreased while actual loss value decreased in this quarter when compared to Q2 2017. The analysis above shows that the industry saved 57% in the fraud volume and attempted fraud value.

57%

of the attempted fraud value was salvaged by the industry.

Fraud By Channel

ATM -- Volume - 2, 061, Value - N137 million

Fraud Value Comparison by Day (Q3 vs. Q2 2017)

ATM fraud values stand at N195M and N137M representing 21% and 34% of the total attempted and actual loss value respectively. The channel also has the highest volume and value of fraud this quarter. When compared to Q2, ATM fraud volume decreased yet its loss value increased. The actual loss value of ATM increases by 11% and 23% when compared to Q2 2017 and Q3 2016 respectively.

MOBILE -- Volume - 1,189, Value - N106 million

Mobile recorded the 2nd highest loss in value representing 25.9% of the total actual loss value. Mobile fraud volume also experienced a notable a decrease of 20% when compared to Q2. With 1,189 fraud count, mobile represents about 20% of the total fraud volume for this quarter.

POS -- Volume - 266, Value - N19.6 million

POS witnessed a 45% decrease in actual loss value when compared to Q2. 54

E-PAYMENT REVIEW December 2017

Just like Q2 2017, Wednesday recorded the highest volume in Q3 2017. Thursdays and Tuesdays maintained second and third position respectively. Wednesday recorded the highest loss in terms of value for the quarter. Thursday and Tuesday represent second and third position respectively

OFIs Q3 2017 Fraud Summary

value. It also represents 57% of the total actual loss value and 75% of the total fraud volume for Q3.

Fraud volume The OFIs recorded 48 fraud counts and all the attempted amounts were lost entirely within the quarter. In comparison to Q2 2017 and Q3 2016 respectively, there was a decrease of 57% and 91.5% in fraud volume. Attempted fraud value shows a decrease of 79% and 95% in comparison to Q2 2017 and Q3 2016 respectively.

Fraud Volume

Actual loss count

Fraud Volume Comparison by Day (Q3 Vs Q2 2017)

Individual Accounts

Corporate Accounts

Q3 2017 Vs Q2 2017 Comparison

Q3 2017 Vs Q3 2016 Comparison

decrease

57%

Fraud by day

91.5%

Fraud Value Comparison by Day (Q3 Vs Q2 2017)

Attempted Fraud

N4.6 million

Q3 2017 Vs Q2 2017 Comparison

79%

decrease

Q3 2017 Vs Q3 2016 Comparison

95%

decrease

Actual Loss Value

N4.6 million

Q3 2017 Vs Q2 2017 Comparison

76%

decrease

Q3 2017 Vs Q3 2016 Comparison

93%

decrease

Just like Q2, the OFI report showed huge reductions in fraud volume, attempts, and actual loss when compared to last quarter. The industry was unable to salvage any of the attempted fraud in terms of volume and value. This scenario was also the experience in the last quarter.

No amount was salvaged from the fraud attempts.

Fraud by channel

ATM -- Volume - 4, Value - N451, 000

For the OFIs, ATM recorded 24 fraud cases in Q2 which shows a decrease of 40% when compared to reported fraud cases in Q1. Although there were no salvaged amounts in attempted fraud on ATM in Q2, there was a noticeable decrease when the volume and value were compared with that of Q1.

ACROSS THE COUNTER -- Volume - 1, Value - N80, 000

As with last quarter, a count of a single fraud was recorded. Its actual loss amount also reduced by 20% Across the counter made up for 1.7% of the entire loss value.

INTERNET BANKING -- Volume - 1, Value - N100, 000

Internet banking also saw a count of 1 with an actual loss value of N100K. This channel also made up for 2% of both the entire fraud volume and actual loss value.

MOBILE -- Volume - 6, Value - N1.3 million

The mobile channel decreased as well in both value and volume. The channel accounts for about 29% of the total loss value for Q3. Mobile fraud volume experienced a notable decrease in Q3. The huge dip in its actual loss value when compared to Q2 represents 92% decrease.

WEB -- Volume - 36, Value - N2.6 million

The Web channel which is usually a preferred channel of interest for fraudsters with regards to OFI spiked with a 214% increase from last quarter’s actual loss

Thursday recorded the highest volume in Q2 2017 with Monday, Tuesday and Wednesday followed suit. Friday recorded the highest loss in terms of value for the Q2. Thursday stands at second position.

Fraud Interest Index [FII] Fraud Interest Index is a mathematical fraud model that shows the channels with best ROI for fraudsters. The greater the ROI, the higher the probability of investing in the business. Although ATM displaced Mobile to emerge highest on the Fraud Rate Index when compared to last quarter, both channels are trending as channels with the greatest interests for fraudsters. These channels need to be closely monitored and more stringent measures applied.

BVN Watchlist Report No of reported fraudulent BVNs in the quarter

174

No of BVNs sent for watch listing in the quarter

174 BVNs were placed on the watchlist within the quarter with only 23 BVNs reported fraudulent on the Industry Anti¬fraud portal. This again indicates an apparent increase in the watchlisting of fraudulent BVNs.

Bank Verification Number for Investigation The BVN has been an effective tool in the fight against fraud. Apart from solving identity issues, the BVN has helped the industry tremendously in the area of fraud investigation and recovery. Within this quarter, banks have sent a total of 902 BVNs to NIBSS to aid their investigations. Out of the 902 BVNs investigated for various fraud cases, only 23 BVNs was reported on the Industry Anti-Fraud Portal and only 174 BVNs was sent for watchlisting. Banks are implored to have all fraudulent BVNs reported on the Anti-Fraud Portal and sent to NIBSS for watchlisting, JULY Banks requested accounts linked to 302 BVNs. Total fraud amount in relation to these BVNs: N2.2b.

AUGUST Banks requested accounts linked to 318 BVNs. Total fraud amount in relation to these BVNs: N799m.

SEPTEMBER Banks requested accounts linked to 282 BVNs. Total fraud amount in relation to these BVNs: N161m.

Courtesy of the Nigeria Inter-Bank Settlement System Plc (NIBSS). E-PAYMENT REVIEW December 2017

Roundtable Y E A R-E N D E D I T I O N

CAN OPEN APIS UNLOCK INNOVATION IN DIGITAL FINANCE?

TWITTER - SAYU ABEND / FCMB / DISRUPTIVE AFRICA / LINKEDIN

This Roundtable looks at Open API as a trigger for tech startups to fashion additional banking use cases that would drive more transactions

HOW TRANSFORMATIVE CAN OPEN APIs be and how much can they change the way financial services are delivered? ADIGUN: APIs or Application Programming Interfaces are connectivity bridges between systems, enterprises, platforms or businesses to facilitate information sharing or exchange in a language the parties understand and honour. They usually follow some set of standards or routines as agreed by the parties involved to pass instructions and receive the outcomes of such instructions from the other parties. Open APIs are both a technology and a mindset phenomenon with the potential to completely change the way we think about banking. Since the objective of the digital transformation move is to ultimately delight customers and engender advocacy by leveraging the power of analytics, automation and artificial intelligence (AI), using the APIs and open APIs will definitely foster this course. OKOYE: Open API will enable the delivery of new customer driven products and services and create new distribution channels through collaboration among business units within a bank, among banks across the industry, and between banks and other related sectors of the economy, particularly technology and data businesses. Open APIs can address declining satisfaction and high churn among financial institution's corporate customers as it makes it easy to seamlessly integrate financial services into customers' increasingly digitized supply chains and harmonizing interface standards across banks. It will also result in decoupling product management roles allowing the financial institutions to focus on their areas of strength while also allowing third parties to take the other roles. That is, multiple parties work together to create new value chains to and produce better products and services. ABEND: With the level of fragmentation in the market today across the banking and fintech space as a whole, open APIs are geared to be disruptive in the most positive sense. Fragmentation drives the need for interoperability for the benefit of the consumer. The most important thing for fintech providers 56

E-PAYMENT REVIEW December 2017

is natural adoption by the consumers. Open APIs will only help drive adoption because it makes things easier for them. It will be the next disruption in the fintech space. OBADIMU: Open API is the way to go for the convenience and ease that financial institutions have always craved. Today, itâ&#x20AC;&#x2122;s close to impossible for banks to reach out to millions of customers via a call centre or relationship management but with open API, they will have more access and more insight into customerâ&#x20AC;&#x2122;s habits/lifestyle. An open API will also avail providers of financial services the opportunity to innovate in their product development processes. How do APIs provide a crucial bridge between fintech companies and financial intuitions? OKOYE: Because fintech is a market driven imperative, financial institutions can position themselves as partners of fintech by allowing startups to use their assets to improve their products and services. These assets could be services that would not otherwise be available to a typical fintech incubator or participating fintech entities. An example is a sandbox banking environment that would allow fintech coders to work with banking APIs; have access to risk and compliance bankers, credit officers, and retail banking for pilot products. This bridge will also allow banks to keep "owning" their customers while fintechs are allowed to offer the best financial products possible. OBADIMU: Financial institutions are heavily regulated so it will be impossible for them to open up their core banking applications to direct access by a third party. API provides this crucial bridge where there is interconnectivity which only avail information required for the reason of that API. Fintech companies require a customer base giving them access through open APIs will speed up the pace of innovation. ADIGUN: APIs provide a bridge between fintech and financial institutions (FIs). Fintech layers different services for customers to use but because the money is with the bank, they need to connect to the banks. With open APIs it makes it easy and stress free for the

Abend

Okoye

RESPONDENTS Sayu Abend Founder and CEO of Spacepointe Oluwakayode Adigun, Divisional Head, Service Management & Technology, FCMB Emeka Okoye Founder/ CEO Cymantiks Nigeria Limited Oluwatosin Obadimu Team Lead Internal Control and Compliance, Fidelity Bank Plc

fintech to sell their products and services and get paid through the banks without having to see the customers physically to authenticate validity and transact. This makes cost to serve extremely low and customer experience satisfactory due to convenience, speed and secured value delivery. There are so many things that will happen when APIs are provided by FIs and we will see a rapid growth in terms of innovation and revenue for

Adigun

Albert

Obadimu the FIs as well. Because at the end of the day the FIs will be the greatest beneficiary of every innovation in the sector. ABEND: It’s about creating an omni-platform for the consumers. Open APIs enable consumers to handle their business from one platform so to speak. The ability to login to your banking app for example and pay your taxes, buy data for your phone or pay for your cable bill is a convenience that only does one thing: drives consumer adoption. Are there distinct open API strategies a bank can deploy, and what are the advantages and disadvantages associated with each approach? ABEND: Banks should create their strategy based on customer’s needs and not on the “me too” agenda. It is common to see banks spend a ton of money trying to join the “gang” of other banks and not necessar-

ily because it makes complete sense to their consumers. The strategy employed must be driven by the following mindset: “This makes sense to me, creates unmatched convenience and truly integrates the customers world.” OBADIMU: The strategies will be dependent on trust which both the fintechs and banks must exhibit for a successful collaboration without which nothing can be achieved. If there is trust, the sky is the limit for both parties in their symbiotic relationship. ADIGUN: The new ecosystem is comprised of not only financial institutions, but also retailers, high-tech companies, social media, crowdsourcing platforms, and potentially anything that involves financial information or transactions. In this new ecosystem, APIs are a new channel for doing business and need to be given that importance. The monetization of the API economy presents a new source of revenue, so APIs should be productized and marketed as a source of competitive advantage, like any other traditional product. There is no value in having the best banking platform if developers don’t want to open the front door. Successful APIs require healthy internal and external developer communities and so APIs also need to be easily found, understood, and used. Banks need not only offer services to be consumed by external third parties, but also think creatively on how to use thirdparty services for their own offerings. OKOYE: They can use these four strategies are as follows: One, integrator: banks continue to control both production and distribution of products and services, but they will need to match others in terms of speed to market and putting customer demands at the heart of what they do as a bank. Two, producer: banks focus on development of products and services and distribute those via third parties. But this could result in disintermediation of banks from the customer, as both the producer and distributor will want to control branding and the customer relationship. Three, distributor: banks focus on distribution of products and services created by third parties, but it could lead to a conflict with the "producer" around branding and customer ownership. And four, platform: banks retain a stake in both production and distribution by acting as a market intermediary that facilitates activity among customers, producers and distributors in the market. Disadvantage – none. Why is it taking financial institutions longer to open their APIs? OBADIMU: As earlier indicated, financial institutions are heavily regulated and any planned detour from their approved methods of operation will have to be critically assessed to ascertain the risks that might arise. ADIGUN: It is due to regulatory issues.

Over-regulation of financial institutions sometimes stops them from been innovative. Except the financial institutions take a bold step they will not easily adopt technology. There are also concerns about data privacy and possible leakage of users’ information, fear of fraudulent financial transactions via API and the lack of knowledge and skills. One critical issue is the conservative nature of financial institutions. They don’t often put the big picture to mind. Because banks are making easy money in some areas, they don’t bother to innovate or invest in Open API. ABEND: For the bigger institutions especially, they have not prioritized this on their IT roadmaps. Even with those that have the goals of the Open APIs, it is still not a top priority. Another reason is management not truly understanding the opportunities that Open APIs present. Some banks have not employed true market strategists and industry thought leaders to help them understand what the opportunity is so they basically remain in the dark. OKOYE: So many factors namely: lack of awareness or education, fear of the unknown or fear of allowing the competition to create better-priced financial products, lack of a supporting organizational culture and a lack of support from regulators. Would creating an Open API standard and governance framework force banks to open up theirOlubiyi systems to third parties, or hasten the rollout of open APIs? OKOYE: Not necessarily. Banks can choose to maintain their present system, adopt minimum strategies or comply fully. ABEND: Yes, it most certainly would at minimum bring an awareness to the possibilities presented by Open APIs. ADIGUN: The greatest impediment to the success of any digital transformation is the difficulty in accepting change. To force the change, we will need an open API standard and governance framework and this will involve the regulatory authorities championing the governance process. The European Banks are already working with PSD2 framework which clearly defines what and how to approach Open API deployment. Since we usually take a cue from European policies and framework, they have done the job for us all we need to do is to tweak the framework to suite us and the banks will roll with it. OBADIMU: Yes, it will help but it might require setting up another body that would have to regulate or oversee API standards and how the banks and fintech firms will conduct themselves within the relationship. Moving forward on this must be supported by the Central Bank. However, banks may be careful in being part of the first set of institutions opening up their system. E-PAYMENT REVIEW December 2017

E-PAYMENT REVIEW December 2017

Payments

State of

Y E A R-E N D E D I T I O N

VISA FETES WINTER OLYMPICS WITH PAYMENT WEARABLES PYEONGCHANG 2018 VISA IS VERY FOND OF SHOWING OFF ITS TAP-TO-PAY TECHnology at the Olympics, and that’s truer than ever with the 2018 Winter Olympics around the corner. The payment giant has created a trio of NFC-equipped gadgets -- payment gloves, commemorative stickers and Olympic pins -- that allow fans and athletes to complete seamless and secure payments with a simple tap at any contactless-enabled terminal at the Olympic Winter Games in South Korea. Visa, which handled $1.93 trillion in payments last quarter, is the exclusive payment technology partner at the Olympic and Paralympic Games. It is managing the entire payment system infrastructure and network throughout all venues within the Games. This includes more than 1,000 contactless point-of-sale terminals capable of accepting mobile and wearable payments. Visa has clearly put some thought into its choices. Inspired by the long-standing tradition of collecting commemorative pins at the Olympic Games, Visa is bringing to market four unique lapel pins featuring custom PyeongChang 2018 designs to offer a paymentenabled collectable that fans and athletes can also utilize on-site. The average temperature in PyeongChang will be – 4.8°C, so gloves will be a must-have! Its payment glove will offer fans a way to pay safely and securely without having to get cold hands. The gloves contain a dual interface chip housed with a contactless antenna capable of completing purchases throughout official Olympic venues and compatible readers globally. With a thin and flexible adhesive design and an embedded dual interface NFC-chip and antenna, Visa’s micro-tags can be attached to almost anything to make seamless payments in a moment’s notice. The collection includes 8 distinct designs including Soohorang – the official PyeongChang 2018 mascot – the Korean flag, and much more.

RINGS ARE NEW TICKET TO RIDE MOSCOW TUBE

YANKODESIGN / FINGOPAY

THE PAYRING COMMUTERS IN MOSCOW WILL NO LONGER have to fish electronic cards from their pockets to pay for a ride after the city’s metro introduced payment rings and bracelets. The new ring will work on the metro, train and bus systems throughout the Russian capital city. Moscow will be the first metro system in the world to use the technology and the result of the company’s tests show that the use of the rings could speed up the flow of passengers to and from the underground stations. The ring itself is a relatively new design but in the future it has the capability to be used in other ways, such as an alternative to a bank card or an electronic key. They are made from water- and shatterproof ceramics, run using the SCOne OS developed by the ALIOT company, and available in different designs and colours.

E-PAYMENT REVIEW December 2017

State of Payment Y E A R-E N D E D I T I O N

A WEARABLE VIRTUAL CURRENCY DEVICE FESTY WRISTBAND

GIVE YOUR PIN TO STRANGERS WITH THIS BANK CARD OF THE FUTURE DA VINCI CHOICE CARD IT'S THE SIZE AND SHAPE OF A NORMAL CREDIT CARD, AND CAN BE USED in exactly the same way anywhere that accepts MasterCard, but the new Da Vinci Choice card is anything but normal. Why? Firstly, it's as many as eight cards in one – letting you carry one piece of plastic then select which account the money comes out of at the point of sale. Secondly, it's a card where no one – ever – will be able to steal your PIN or card security code to use online. In fact, criminals won't even be able to use it in a contactless transaction. The Da Vinci Choice card is the brainchild of Simon Hewitt – a man who's worked in banking security for the likes of American Express, JP Morgan and Standard Chartered Bank. His mission was simple – make a safer credit card. The execution is a marvel of technology. On top of the traditional chip and magnetic stripe, the card also includes a working screen, keyboard, processor and battery – without making it any bigger or noticeably more fragile than a standard card. What all that technology lets you do is generate a new PIN or card security number every time you use it – with the screen displaying that number for you – as well as choosing which card to use.This means that even were someone to steal your card and PIN, it would be utterly useless to them when they tried to use it themselves.

HELPS SELLERS INVOICE BUYERS ON FACEBOOK PAYPAL EXTENSION

STEEMIT

A NEW INTEGRATION OF PAYPAL within Facebook Messenger, designed to make it easier for small-scale sellers to request and receive payments, could challenge the business of classified marketplaces like OLX and Jiji. PayPal’s new Messenger chat extension brings a full-fledged payment experience to the Facebook app and its 1.3 billion users. Sellers will now be able to configure an invoice on the spot, while buyers get full buyer protection in case there is a problem with the goods. People wanting to sell a bunch of stuff online could create a short name for each item, add a description (optional), quantity, and amount. Buyer simply hit “Pay with PayPal” when they receive the seller’s message, and can pay swiftly via PayPal One Touch. The entire transaction takes place within the app. 60

E-PAYMENT REVIEW December 2017

CRYPTOCURRENCIES ARE ENJOYING A groundbreaking year. The market is growing in popularity, attracting investors and sending crypto values to ever new heights. However, the market currently lacks the technology necessary for everyday use in real-world scenarios. Bitcart is looking to rectify this. The Irish startup has developed the world’s first Dash cryptocurrency payment wristband. Named Festy, the device allows the wearer to pay for products with the Dash cryptocurrency. Users can add funds to their wrist-mounted “wallet” at a Festybranded ATM or using an online transfer service. Although Dash is a cryptocurrency, Festy is compatible with any point-of-sale system that accept Visa contactless payments. It can also be used to make payments on any phone or computer using near field communication (NFC) tags or offline payments via quick response (QR) codes. The wristband is designed primarily for bar and festival hoppers and can also be used to store tickets, which could play a role in eliminating fraud or verifying ages of compliance at events.

DIGITS

500 billion

Projected number of card payments worldwide by 2022, a 56% rise from 310 billion in 2016 , according to strategic research and consulting firm, RBR.

$600 billion

Value of cryptocurrency market by end of November. Leading the charge is Bitcoin, which has a robust market cap of over $329 billion.

GOOGLE PAYMENT

Using sound for money transfers GOOGLE RECENTLY released a mobile wallet that seems like a blend between Android Pay and PayPal. Called Tez (Hindi for "fast"), users can link it to their bank accounts and use it to pay for items in physical stores and online without sharing their account info. The app also allows money to be transfered securely to nearby users using sound to pair devices (Google calls it "Audio QR"). The tech works on any smartphone in India, whether Android or iOS. Tez currently supports several Indian banks using the government-backed Unified Payments Interface (UPI) for free mobile bank transfers.

WORLD'S FIRST OIL-BACKED LEGALLY COMPLIANT CRYPTOCURRENCY IN EARLY 2018, THE WORLD'S NEWLY CREATED FIRST LEGALLY-COMPLIANT digital currency based upon a physical asset will go on sale. Known as OilCoin, it will tokenize barrels of oil held in reserve with each token representing the value of one barrel. Its asset support will provide global users of digital currency with a meaningful safe haven from cryptocurrency volatility. At $1.7 trillion in annual transaction size, the global oil market is the single largest and most actively traded and liquid commodity market in the world. It is 10 times the size of the traditionally accepted reserve gold market and is larger than all global raw metal markets combined thereby providing unique intrinsic support for the development of a globally accessible digital currency. As explained in the OilCoin White Paper, oil reserves will be sourced, held and managed by affiliate entities of the OilCoin Digital Reserve. The price of an OilCoin token will approximate and move in tandem with the price of a single barrel of crude oil. As demand for OilCoin causes the price of a single OilCoin to rise above the price of a barrel of oil, additional OilCoin will be issued and the proceeds will be invested in oil reserves. As transaction volume of OilCoin expands, holders will receive additional OilCoin as a share of transaction fees.

In Brief Cash still eurozone king

CASH STILL DOMInates consumer payments in the euro zone, even as many Western economies are rapidly moving towards electronic payments, a survey published by the European Central Bank showed. The figures indicate that the euro zone is one of the slowest among big Western economies in giving up cash, trailing countries like the United States, Britain, Australia and Canada.

Swiss to get single digital ID

ALCOHOL POLICY UK In a move that could speed the decline of the humble bar tender, Reading University has introduced a self-serve 16-tap "beer wall" where students buy their beverages with a single tap of their debit or credit card. Screens above each tap allow customers to choose which brand of beer they want, show how much it will cost, and display information about the beer, including the percentage of alcohol by volume..

MICROSOFT PAY

USING THE WINDOWS 10 Creators Update, Microsoft has rebranded its built-in payments framework on Windows 10 from Microsoft Wallet to Microsoft Pay, which is now available for use at any online store that supports the “Payment Request API” in Microsoft Edge.

DRINK COMMAND / SQUARE ,/

VISA VIBRATION

VISA HAS ANNOUNCED A suite of new sound, animation and haptic (vibration) cues that will help signify completed transactions in digital and physical retail environments when you pay with Visa. The sensory branding will be available as a software development kit (SDK) on the Visa Developer Platform, and through the Visa Ready programme for deeper integration requirements, in 2018.

SWISS CONSUMERS will be able to use a single digital identity to buy online products and services under a project unveiled by big companies that include UBS, Credit Suisse, Swisscom, Swiss Post, stock exchange operator Six, Raiffeisen, Swiss Railways, Zuercher Kantonalbank and insurer Mobiliar. The aim is to let people use just one login profile to order in shops, buy train tickets or do banking transactions, according to the consortium.

High-tech fabrics

POS MAKER OPENS BRICK-AND-MORTAR STORE AS ELECTRONIC PAYMENT CONTINUES to go mainstream, Square, the company behind those ubiquitous white registers, has officially opened its first retail store called the Square Showroom. The idea behind the store is to give business owners a chance to try out products like Square's point-of-sale hardware as well as its slate of business software. The Square Showroom is located in New York and will offer a support desk for troubleshooting problems and will feature goods and items sold by merchants using Square.

RESEARCHERS AT the University of Washington have found a way to store digital data into clothing which could allow the wearer to make payments or open electronic door locks. The machine washable fabrics won’t lose the data that’s embedded in them. Think of it as a mini-hard drive that doesn’t need batteries to work. They also created accessories like a tie, belt, necklace and wristband and decoded the data by swiping a smartphone across them.

VENEZUELA TO CREATE OWN DIGITAL CURRENCY TO END THEIR FINANCIAL CRISIS

MADURO'S MONEY THE VENEZUELAN GOVERNment is pursuing a new form of digital currency, backed by oil and other mineral reserves, in order to address the collapse of the country’s economy. The Venezuelan cryptocurrency, the ‘petro,’ was announced by president Nicolas Maduro during a television broadcast. Sanctions by the US make it very difficult for Venezuelans to transfer funds via international banks, and the plummeting value of the bolivar against the dollar makes online purchases from foreign retailers prohibitively expensive. The country’s currency controls have led many tech-savvy consumers to turn to bitcoin, but authorities want to offer a governmentbacked alternative.

REGULATOR WANTS U.S. TO LET MORE COMPANIES OFFER BANK SERVICES

BANKING IN THE UNITED STATES U.S. REGULATIONS THAT bar companies such as Wal-Mart from providing banking services should be reviewed as they reduce competition and concentrate more risk among a smaller number of banks, a U.S. banking regulator has said. At a banking conference in New York, acting Comptroller of the Currency (OCC) Keith Noreika urged resumption of debate over whether to allow other types of businesses to engage in traditional banking. His speech challenged traditional U.S. thinking that frowns upon mixing banking and other commercial activities because of fears that customer deposits would fund or subsidize risky non-banking business. E-PAYMENT REVIEW December 2017

Last Word Y E A R-E N D E D I T I O N

In 2018, train your employees to think like hackers

For more hands-on cybersecurity learning, arrange company-wide competitions and games that encourage employees to figure out how cybercrime could potentially happen. You can even take it a step further and role play a fictitious cyber incident. Acting out a breach scenario can help employees, technical or not, better relate to organizational risk and inspire a new level of mindfulness when it comes to cybersecurity. Incident and information sharing When something major happens in your industry, encourage teams to share findings and analysis. That’s not to say everyone needs to be writing up ten page reports — a few quick thoughts will do. The idea is to condition your workforce to make it second nature to share information and insights. When you break down the silos that exist across teams in so many companies today, it helps build community and create a shared purpose, which are powerful defenses when it comes to cybersecurity. It helps create a more vigilant workforce that is more likely to detect and respond to threats. This is especially important with security teams. When there’s an incident, they should debrief a broader group on what happened and how they responded. If vulnerabilities are found and fixed, they should work with the software architects, designers, and engineers to help them avoid making similar mistakes in the future. When industries are hit by major cyberat-

BY MARTEN MICKOS

HARVARD BUSINESS REVIEW

COMPANIES (BANKS ESPECIALLY) THAT WANT TO help their employees become better stewards of cybersecurity need to go beyond regular trainings on password security and other basic protocols. The best way to train employees to defend against hackers is to teach them how to think like one. The first step is getting smart about what it actually means to be a “hacker.” Start by forgetting everything the media and entertainment industry has told you about hackers. The media has a history of sensationalizing the term by using it to denote cybercriminals. This is too narrow a view. In many ways, hackers are the model citizens of the digital era. They are creative, persistent, and resourceful. They think in digital terms and have the curiosity and drive to figure out how technology works. They view every problem as an opportunity. They stand up for what they believe in and they want the world to be a safer place. Hackers also know a thing or two about the limits of technology. They have a healthy mistrust of computer systems and they understand that no software is immune to bugs (and that even without bugs, software will still have security vulnerabilities). They also know that just because computers and software can do a lot of good, it doesn’t mean they can’t also be used for doing a lot of bad. To them, it goes without saying that software will always do MORE than it was intended to do, and so they are constantly on the lookout for vulnerabilities. For those of us who were born before the digitalization of society (probably the majority of your workforce), these concepts may sound foreign. But for hackers, it’s simply the way the world works - and they’re right. That’s why it’s so important for companies to start cultivating the hacker mindset inside their own organization today. Not only can it change the way employees view and value cybersecurity, which leads to better security across the entire organization, but it can also help your workforce become more curious and resourceful — two of the most valuable skills in a future with widespread artificial intelligence and automation. Here are a few ways companies of any size can start teaching their workforce to think like hackers: Hackathons and Competitions Encourage employees to attend hackathons — even if only perhaps to observe or learn. These events give people a chance to take a step back from their day-to-day work for a moment and think creatively to solve some kind of problem, which is what “hacking” is all about. Sometimes these events are related to the product or business, but they can also be focused around something else entirely. The idea is to get people shifting gears and exercising their mental muscles in new ways. This helps teams avoid tunnel vision and groupthink, and gets them thinking more creatively. It also makes everyone more observant and curious about the world around them, which is at the very heart of good cyber hygiene. 62

E-PAYMENT REVIEW December 2017

tacks (like WannaCry) or vulnerabilities (like Heartbleed), the security team should actively circulate updates and information with the entire company and also host open Q&As for those who want to learn more.

When you break down the silos that exist across teams in so many companies today, it helps build community and create a shared purpose, which are powerful defenses when it comes to cybersecurity.

Teaming up Create a mandate for employees to work across departments and teams. This helps open up better lines of communication across the entire organization and also helps teams solve all sorts of challenges with a fresh perspective. Even if your security team is the best in the business, the reality is that all humans are fallible. When the same people are looking at the same codebase or dashboard every day, it’s only a matter of time before something important gets overlooked. That’s why the most security-conscious organizations look for help outside of themselves - i.e. inviting talented and trusted outside security experts to help identify vulnerabilities. They also keep internal security and product teams coordinating closely as new products and features are developed. While some vulnerabilities are caused by deficiencies in the code, others result from hidden functionality that is there by design. Brining the security team into the process early can help uncover and resolve these would-be issues before they become real vulnerabilities. Looking to the years and decades ahead, we must all learn to think like hackers. When you adopt a hacker mindset, you aren’t traumatized by rapid advances in computer technology. Instead, you embrace them and recognize their ability to make the world a better and safer place. That’s not just good for security - it’s good for business. Marten Mickos is the CEO of HackerOne. Previously, he served as CEO at Eucalyptus, a cloud software company acquired by HP and CEO of MySQL, an open-source database company acquired by Sun Microsystems. The opinion was first publsihed on hbr.org.

E-PAYMENT REVIEW December 2017