By Mark T. Amoguis
Senior Researcher
SHANGHAI, CHINA — Payments provider Visa, Inc. unveiled a three-year road map that aimed to strengthen payments security in the Philippines, where many Filipinos still prefer to use cash over credit despite the rise of e-commerce.
“There’s amazing benefits of data but data is also a problem. If we’re using it in a sophisticated, consistent, standard, well-governed way, data is also the answer to the problems we’re facing as we think about the future as well,” said Visa Regional President for Asia-Pacific Chris Clark said during the Visa Security Summit in Shanghai, China last week.
The Future of Security Roadmap for the Philippines focuses on a number of key initiatives which includes devaluing data (removing sensitive data from the ecosystem and making stolen account details invalid); protecting data (implementing safeguards to protect personal data as well as account details); harnessing data (identifying potential fraud before it occurs and increasing confidence in approving genuine transactions); and empowering everyone (including account holders, third-party providers, and merchants to play an active role in payment security).
According to Dan Wolbert, Visa country manager for the Philippines and Guam, Visa is working collectively with its clients and partners to bring down fraud rates to historic lows.
“Through the release of the roadmap, we will take the lead in championing security for the Philippines, and ensure we address any gaps in payment security for the country,” Mr. Wolbert said in a statement released on Friday.
“Visa is committed to ensuring that security moves at the speed of innovation through collaborations with the industry stakeholders, merchants, policy makers, law enforcement, and accountholders,” the statement read.
In the Philippines, there are 9.4 million credit card users as of end-2018, an 18% year-on-year increase from 8 million in 2017, Bangko Sentral ng Pilipinas (BSP) data showed.
According to the central bank’s Financial Inclusion dashboard as of fourth quarter last year, e-commerce and mobile banking penetration rates in the country is at 39% and 28%, respectively, citing We Are Social 2018 data.
SPECIFIC INITIATIVES
Shivakumar Sriraman, Visa chief risk officer for Southeast Asia, described the roadmap as a set of market-specific initiatives.
“Some of them might be common among different countries. Some of them might be slightly different because everyone is in a different stage when it comes with the evolution of payment security,” Mr. Sriraman told the reporters during the Visa Security Summit in Shanghai, China last Wednesday.
“This roadmap is not cast in stone because what we see as a threat or an attack today might not be one probably six months down the lane. We might have to amend the security roadmap. This will be reviewed on a periodic basis,” he said.
During the media briefing, Visa said its existing security solutions include Payment Card Industry Data Security Standard (PCI DSS), third-party agents registrations, and EMV migration.
For the next three years, the company is batting for the adoption of 3-D Secure 2.0, tokenization, transaction alerts/transaction controls, risk-based authentication, and card-on-file tokenization.
“E-commerce is growing extremely fast so we need to be extra careful if we think about it,” said Joe Cunningham, Visa head of risk for Asia-Pacific, adding that as commerce is shifting to digital so are the criminals.
He said the percentage of e-commerce merchant attacks was logged at 27% in 2015 but it ballooned to 76% in 2017.
“The ideal set of security solution is a multilayer solution. We should never rely on one thing,” Mr. Cunningham said.
In a country where the cash remains the king, the BSP targets to hike the share of digital payments to 20% by 2020 of total transactions from a measly 1% recorded in 2013.
Under the National Retail Payment System, the central bank plans to shift cash-heavy transactions to digital avenues. In implementing this, BSP launched two clearing houses: the PESONet (batch payments) in 2017 and InstaPay (small value payments) in 2018.
When asked if the Philippines can meet its 20% target by next year, Visa’s Mr. Clark said: “We’re working very hard. Everyone in the system is working very hard in this and we’ve seen a lot of growth. The most important thing is that the government and the regulator is 110% behind what the industry is trying to achieve.”
“And when you have that support, it makes the outcome much more achievable,” Mr. Clark added.
