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The Malta Independent | Thursday 15 January 2015
Better technology will bring more secure mobile payments
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nyone who has been paying attention to the security of credit card purchases should be concerned. Starting in 2007 a major clothing retailer holding company experienced the theft of data from 45.6 million credit and debit cards. Since then, there has been an explosion in theft of email addresses, credit card information and other personal data which has been stolen, resold and reused by the hackers for financial gain. For shoppers, these thefts are mainly a nuisance. They must replace a card, check records for fraudulent purchases, and worry about further problems in the future. The merchant or banker - the responsibility depends on the precise terms of the transaction - has the more immediate loss that can add up to hundreds of billions. The numbers of thefts suggest that even vigilant merchants have a very hard time losing customer information, including names, credit card numbers, the card verification code (the three-digit check card on the back), and sometimes passwords and addresses. The Search for a Secure Solution Given the situation, it is no surprise that vendors, card processors, and banks are looking for use of better security. What is surprising is that technologies that have been around
for many years are only now being promoted in the U.S. and progress may be further slowed by a fight between banks and small vendors backing one technology and big vendors the other.
Then came Apple Pay. The technology, standard in the new iPhone 6 and 6 plus, benefits from the Touch ID finger reader used to identify the buyer. The software is built into the iOS 8 operating system.
The Current Technologies One technology has been around for a long time but is only now attracting common use. It depends on a device to securely store customer information and transmit it without loss. The other is short-range wireless radio to connect with the network. The techniques mainly used are EMV (for Eurocard-MasterCardVisa) to handle the data and NFC (near field communication) to transmit it. The EMV technology was designed around 1990 and is endorsed by most of the world’s credit card companies. Some manufacturers, starting with Nokia, used EMV to enable mobile phones to replace credit cards. NFC has been around since Nokia, Philips, and Sony established the Near Field Communication Forum, and Nokia brought out its first NFC-equipped phone in 2006. Google brought out easier credit card technology with Google Wallet for store purchase in 2012, and most of the up-market Android phones have the required EMV and NFC components.
The Showdown: Banks vs. Retailers Apple Pay was part of the heavy promotion of iPhone 6 and many companies supporting its use, especially the members of the bank group that signed up and began promoting Apple Pay even before the new iPhone shipped. The hardware and software of Apple Pay and Google Wallet are somewhat similar. But Apple is getting the promotion from participating banks and vendors, who have mostly been quiet about Google Wallet. Meanwhile, Samsung and other Android manufacturers rarely publicise the availability of Google Wallet. This explains why the reaction to Apple Pay has been so much more exciting. The competition that really matters is coming not from other phone makers but a consortium of large venders such as Wal-Mart and Target. They are supporting a rival technology from the Merchant Commerce Exchange (MCX) that has developed its own technique, CurrentC. CurrentC is designed to be used
on the existing hardware of many phones, though detail of the software has not been made available. Communication of information from the phone is provided not by radio but by a QR barcode to be read by a receiver in the store. Like Apple Pay, the information attractive to thieves is no longer available as in standard credit card transactions. The problem is that CurrentC is just running a trial and the service is not yet available. Meanwhile, Apple Pay and Google Wallet, which require the same information on the store end, are out and being used now. And while Apple Pay only works on the iPhone 6 (and, in a limited way to protect internet purchases, on the new iPad), the sales of the new models has put millions in use. So the battle boils down to the retailers behind CurrentC and the army of banks and credit card companies - including Visa, MasterCard, Citicorp, and Wells Fargo - backing Apple. The first skirmish in a real fight started just after the release of the iPhone 6. Customers who were buying in stores equipped with NFC readers started using merchants who had not formally agreed
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justified, as only 16% of respondents labelled themselves as
novice technology users while the majority (76%) ranked themselves
The Malta Independent ICT Feature
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he MITA Innovation Hub has recently published an open call for startups to submit proposals for the development of a mobile app which addresses a particular issue in two different thematic areas - development planning and cultural heritage. The selected startups will get €15,000 to be able to research, develop and create their own marketable Intellectual
Property. The way we pay for goods and services is about to get a technological transformation as vendors compete to make phones secure credit cards. This will benefit shoppers as it will enable them to use their mobile phone to pay for their purchases. The technology is already out there and the information that usually attracts cyber criminals and thieves is not part of it. At the end on the tug of war
between Apple and others, we will have a technology that allows us to make far safer transactions. A recent study by AVG found that boomers and seniors feel that technology companies talk down to them. Results show that those over 50 are concerned about security and privacy and that the majority of them rated themselves as average users of technology and thus do not
appreciate companies patronising them. All ICT Features are available on www.mita.gov.mt/ictfeature
Learning by innovating without the fear of failing with Apple. MCX ordered chains, including CVS and Rite Aid, which have signed contracts giving exclusive rights to CurrentC to block the use of Apple Pay in stores. With the dispute between retailers and financial companies over the processing of sales not going away, the dispute is likely to intensify once CurrentC launches fully this year. It will probably be a fairly long battle between the technologies, and maybe both will survive. Either way, though, consumers are likely to benefit from the services that make the theft of credit card information much harder. Used with the permission of http://thenetwork.cisco.com Steve Wildstrom is a technology writer, analyst and consultant. He wrote BusinessWeek’s Technology & You column from 1994 until 2009 to help readers understand and use technology to enhance their jobs and their lives. Before that, Steve served as senior news editor in BusinessWeek’s Washington bureau and edited the Washington Outlook column
Boomers and seniors feel technology companies talk down to them ver two fifths (43%) of those over 50 feel patronised by technology companies. So say the results of the latest study by AVG Technologies N.V., the online security company for 188 million active users, which surveyed almost six thousand people over the age of 50 about their technology habits and opinions as part of its ongoing AVG Digital Diaries research. With CES just over in Las Vegas and many companies launching their latest devices to what is an increasingly competitive market, the research highlighted that older customers can feel that they are treated as technologically illiterate by technology companies. Further complaints among those who felt patronised are that technology companies talk down to them (39%) and that they treat all those over a certain age the same (32%). This treatment is far from
Roderick Spiteri
Roderick Spiteri is Marketing and Communications Manager at MITA and editor of Malta Independent ICT feature
Steve Wildstrom
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The Malta Independent | Thursday 15 January 2015
as average users of tech. The research, which provided
further insights into the device and application use of those over 50, also highlighted some ongoing security and privacy concerns: • 87% of respondents admitted to having some security and privacy concerns over their online activity • 66% worry about the security of their data and files • 44% worry about keeping their personal information private “Technology companies should think hard before they risk isolating older customers,” said Judith Bitterli, Chief Marketing Officer at AVG Technologies. “This is an audience that is expanding, has more spending power and is actively using devices and apps. For example, our research found 83% use apps on their devices. While it is important to address their privacy and security concerns, this must be done in a manner that is considered, not condescending.”
Manager of the MITA Innovation Hub, Alexander Borg, wants to create an environment where startups are given the opportunity to grow, test and develop their own solutions without any fear of failing. And public administration can give a helping hand.
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he MITA Innovation Hub (MIH) is a publicly funded incubator set up in May 2014 to support innovation-related activities and entrepreneurial discovery in the local digital community. It is a co-working space within the government digital landscape where students and startup founders are given an opportunity to experience transformation of their idea into a marketable product or service in a real life setting. The MIH provides physical space, mentorship, access to technologies, legal advice and access to MITA’s many connections within public administration that may also serve as a test bed for the demonstration
of the feasibility of proposed or cocreated innovations. The ultimate aim of the MIH is to create opportunities for startups to grow and develop their own Intellectual Property through various partnerships with industry and academia, and consequently contribute in the creation of national economic growth and jobs. MITA has committed a ten-year investment in the initiative, and has ambitious plans to strengthen its programme to support tech startups, and help develop SmartCity Malta into a cluster of excellence in digital technologies. The hub adopts lean experimental approaches by funding or supporting proof-of-concept projects leaving the ideas open to the proposers. In the summer of 2014 the hub hosted two teams that worked on two separate projects. One was the development of a digital game to help school children acquire a deeper understanding of science, technology, engineering and mathematics, and how they relate to real life. The other was the development of a mobile app to guide ramblers and tourists visiting the Park Majjistral nature and history park. The latter, was developed in record time by four very young students, and is available on both iTunes and Google Play. The Park Majjistral mobile app challenge, in particular, represented our first pilot to test the appetite for such projects, and understand how best to pitch future competitive calls. The goal of the hub is to ensure that startups grow in areas which make socio-
economic sense for Malta, for example tourism; or where there is a practical outcome to the solution they are developing, for example a solution to help drivers weave an optimal route through traffic, which has been become the number one pain point for most commuters. Late last December the MIH published an open call inviting startups to submit their proposals and pitches on how they intend to solve particular pain points in the area of development planning and cultural heritage through the development of a mobile app. This call represents a second, bolder pilot tackling thematic areas of greater significance and impact, and where for the purpose of the project, the respective business owners of the two thematic areas – MEPA and Heritage Malta – will be making available public data to integrate with the mobile app. For this call the MITA Innovation Hub will be making available €15,000 to the startup that submits the best proposal for each of the two thematic areas. The winning startup will have approximately 14 weeks to develop and test a solution with the support of MITA staff, the business owners and external mentors. To get more details about the call, which closes on 11 February, interested startups should visit: mitainnovationhub.gov.mt/startapp15k and also attend an information session on Tuesday, 20th January. Eventually, more calls are being planned, each time adding new variables and increased complex-
ity to favour a learning crescendo, which is also in line with the philosophy of MITA as a learning organisation to be better serve the community. The ultimate aim is to create an ambience which is open, collaborative, and is above all tolerant towards the risk of failure when engaging in research and innovation projects. As the old adage goes it’s only those who do nothing that make no mistakes. Since public administration is, by
its very nature a risk-averse environment due to the fact that it is managing taxpayers’ money, the MITA Innovation Hub is adopting an incremental innovation approach, so that if failures do occur, they will be small and contained. But ultimately, when successes do happen, they will be a vital learning experience for the startups, and an opportunity for them to grow and hopefully generate economic growth and jobs.