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By Thorsten Trapp, CTO and co-founder, tyntec

Concerned about the increase in internet fraud related to online payments, the European Banking Authority (EBA) recently decided that the implementation of a more secure framework for internet payments across the EU was needed. Released in December 2014, the EBA’s guidelines on the security of internet payments set out the minimum requirements that Payment Services Providers (PSPs) in all 28 EU member states will be expected to implement by 1 August 2015.

The guidelines require that PSPs “carry out strong customer authentication” to verify the identity and intentions of all customers in online transactions. This is a welcome development as the latest pan-EU figures showed that fraud on card internet payments alone caused €794 million of losses in 2012 (up by 21.2% from the previous year.

“Strong customer authentication” is defined as something that employs the use of two or more elements to verify a person’s identity, so two-factor authentication is an obvious choice as a minimum standard.

What is two-factor authentication?

Two-factor authentication (2FA)is a security process in which the user is asked to provide two means of identification in order to access private information or complete a task, such as an online payment. Typically, the process will require the user to make use of something they “have” such as a physical object, like a phone or a token, or a unique physical identifier, like a fingerprint, in addition to offering up information they “know”, like a password.

Choosing the right solution

Thorsten Trapp

Thorsten Trapp

The EBA’s guidelines stipulate that the authentication method usedmust meet the following criteria: “mutually independent”, “not reusable”, “non-replicable” and “cannot be stolen off the internet”. This means that while there are many different types of two-factor authentication, not all methods are compliant. In addition, PSPs will need to consider specific requirements determined by country-level mandates and will want a solution that is easy to use,cost-effective and easy to deploy.

Biometric data is one example which offers a strong authentication method but poses usability problems in a mobile environment and can cause issues related to data protection and privacy.Fingerprints can occasionally become unreadable due to cuts or bruises and glasses can prevent an iris from being recognised.No doubt this technology will improve with time but in its current form there is a distinct lack of understanding and practicality which makes it a difficult investment for PSPs to commit to in order to meet stipulated guidelines.

In contrast, SMS-based 2FA is one solution which PSPs can viably consider investing in now due to its user friendly nature, economic cost structure and security effectiveness. Practically, this solution involves sending a One-Time Password (OTP) via SMS to a registered mobile number – a process consumers are already familiar with in their day-to-day lives. It requires the end-user to enter his or her password online after which they will receive an OTP in the form of a text message which can be entered to complete the authentication process. As a result, OTP SMS, an out-of-band two-factor authentication, meets the EBA’s security requirements of “strong customer authentication”and is user friendly, universally accessible, simple to deploy, and cost effective.

Given the expansive reach and ubiquity of SMS, sending security codes via this medium provides an effective solution for service providers looking to provide increased security for their customers whilst adhering to the EBA’s guidelines.

The SMS-based 2FA implementation challenge

The EBA’s guidelines will no doubt spark a flurry of activity as PSPs look to strengthen their online security measures. However, it’s important that companies take the time to carefully consider how they can effectively deploy an SMS-based 2FA strategy.

From an implementation standpoint, PSPs would be wise to work with OTP SMS specialists who can handle the mission-critical nature of the messaging service in terms of speed, delivery rate and coverage.Using SMS-based 2FA as an example, working with a reputable provider will ensure that you have access to a strong infrastructure in order to transmit SMS traffic securely and can provide real-time visibility checks of whether a mobile number is valid or not. This significantly reduces the likelihood of OTP failure making the solution significantly more effective for those using it.

With the guidelines due to come into force in August, there really isn’t much time before we start seeing a major step forward in the levels of security implemented by websites and online services. These regulations will put the idea of strong online security measures firmly in the minds of PSPs and cause them to look at how they can implement effective 2FA strategies in order to adhere to the guidelines of the EBA,or risk having to justify their non-compliance.


Digital Finance: Unlocking New Capital in Disrupted Markets



Digital Finance: Unlocking New Capital in Disrupted Markets 1

By Krishnan Raghunathan, Head of Finance & Accounting Services at WNS, explores how a digitally transformed finance department can give enterprises the ability they need to improve cash flow and revenue through better use of data and improved analytics-driven visibility.  

Businesses everywhere are scrambling to recover lost revenues and protect cash flow. But as countries globally grapple with a dreaded second wave of the pandemic, imposing far more stringent localised lockdowns and new restrictions, it is set to be the hardest winter in living memory for many sectors.

The likelihood of winter peaks, so often the saviour of sectors such as travel and hospitality, benefitting businesses is diminishing rapidly. While many have pivoted to a greater or lesser degree, few have been able to offset the impact of falling revenues on cash flow. Even retail, riding an e-commerce boom in many regions, is finding itself in choppy waters, with 17 percent of consumers switching brands due to the economic pressures and changing priorities caused by the pandemic.

As one McKinsey article notes, “With some companies losing up to 75 percent of their revenues in a single quarter, cash isn’t just king – it’s now critical for survival”. Where then do businesses find new sources of cash to sustain their operations through the coming months?

Tapping Overlooked Cash Opportunities

For many, the answer could depend on whether they have digitally transformed their finance department. Why? Because many organisations are sitting on unidentified opportunities, funds that could be vital in shoring up businesses over the next few months or plugging the gap between operating costs and government bailouts. Yet those that have been slow to start their digital transformation journey are at a disadvantage;. At the same time, it is possible to identify these hidden seams in an analogue organisation, the process is time-consuming, manually intensive and, without the right digital tools, prone to human error.

Where deploying digital tools helps is by bringing speed, automation and reliable data to the fore. Connecting them with digital finance and accounting systems can give businesses clear insights into how money is being spent, where wastage is occurring, and where opportunities for optimisation exist.

Krishnan Raghunathan

Krishnan Raghunathan

It might be something as simple as automating the accuracy checking, issuing and chasing of invoices and late payments. This could reduce errors and invoice disputes and ultimately lead to faster payments. Accuracy and organisation are also important in billing – better records enable faster billing for work completed, and in turn, should deliver quicker payments.

It could also be around having the ability to review the supply chain and procurement data and identify where a supplier is subsidising a larger customer’s product line through drawn-out payment terms, or where a variety of vendors are on different terms across the business.  Using that data and overall knowledge of the business to negotiate better terms that work for both supplier and customer can create new opportunities. It could even be to identify late-paying customers, determine the reason for late payments, and use that intelligence to develop products or financing solutions that continue to support those customers (and improve loyalty) without increasing the burden on the balance sheet.

Generating Reliable Insights for Faster Decision-making

To do any of these manually would take months, generating data slowly that would quickly go out of date. But digital finance departments have evidence they can trust to inform business decision-making. That’s because old, manual processes built around Order-to-Cash lack the flexibility and agility that businesses require in today’s markets. The fact is that even before the global pandemic crisis, the pace of digitisation across all sectors was demanding new approaches to finance and book balance.

The opportunities are significant – from cognitive credit and improved forecasting accuracy to enhanced customer analytics. All use similar tools, based on artificial intelligence and quality, trusted data. Cognitive credit can be deployed to quickly make decisions on whether to advance or restrict credit, based on individual company positions and available data. Doing so enables businesses to either capitalise on opportunities (for instance, agreeing credit for a supplier that has run out but is a supportive and integral partner) or avoid risk (in the cases where a business might be in administration).

With more accurate forecasts, businesses can better manage their currency purchases and deposits, selling currency that is not required or buying more where predictions identify an upcoming demand.

It is the same with customer analytics – with a greater understanding of customer needs, businesses can make decisions based on the right mix of the product (and how it meets demand) and supply chain suitability (such as production costs and location in relation to customers).

In many ways, the events of the past year have accelerated the process. In doing so, the problem is the pandemic has also accelerated the speed at which failure to act can lead to obsolescence. Therefore, it is vital that businesses, and more particularly their finance and accounting departments, kick start their digital transformation. This will enable them to deploy the tools and analytics that is needed to capture data, generate insights and drive fast, accurate decision-making to uncover previously untapped sources of cash and reverse revenue degradation.

The Importance of Digitally Enabled Finance Teams

Forward-thinking CFOs have already begun the process of digitising their departments, but for those that have been slow to start, now is the time to push forward. It is only through digital tools and analytics that finance leaders can identify both the internal and external opportunities to recover revenue and improve cash flow. Whether that’s releasing working capital, minimising revenue loss and accelerating revenue recovery, reducing total cost of ownership or enhancing customer retention – only digitally enabled finance teams will be in a position to capitalise and, ultimately, bolster business performance during what will be a trading period like no other.

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O-CITY enters Kenya to drive contactless payments across Matatu bus service



O-CITY enters Kenya to drive contactless payments across Matatu bus service 2

Up to 10,000 buses to become cashless with O-CITY’s M-Pesa-based ticketing solution

O-CITY, the automated fare collection provider by BPC, today announces its initiative to drive contactless payments across bus services in Nairobi, Kenya. The O-CITY pilot, designed to reduce the use of cash in response to the COVID-19 pandemic, was launched in partnership with transport savings and credit specialists, NikoDigi, and Kenyan payments firm, Tracom, to accelerate the deployment of cashless fare collection.

Used by 70% of the population in Kenya, Matatu buses are a dominant transport mode across the country whereby passengers traditionally pay in cash. O-CITY’s automated fare collection platform leverages the M-Pesa mobile wallet, which is used by 90% of the population in Kenya. Passengers enter a code on their phone and a debit is made on their wallet, which can be instantly seen by drivers to grant access to ride. The platform removes unnecessary tickets and cash payments, instead offering an accessible payment solution that consumers already use, via a device already in their hand.

O-CITY’s platform is also built to make fare collection more transparent between the bus owners and drivers. Buses and routes are privately owned by several operators who ‘lease’ to drivers who must meet daily financial fare targets, before generating their own earnings. Fare pricing differs depending on the route and a range of factors, so digitising the transactions enables visibility and reliability of fare data. With heavily congested routes in Nairobi, digitising fare collection also serves to remove the friction of exchanging money and time taken for drivers to pick up passengers.

An important part of O-CITY’s pilot is an educational campaign to get the bus owners and drivers on board to become champions on the service. With teams on the ground at drop off points promoting the benefits of the service, buses and drivers can enrol in as little as 10 minutes. Local marketing on buses also promotes the ability to pay digitally to passengers.

Patrick Karera, MD at Nikodigi: “Having provided savings and credit management solutions for both the Matatu and Boda Boda (motorbike taxi) sectors, Nikodigi understands the needs of vehicle owners and drivers. Together with our partners, we have designed a product that automates fare collection without taking control away from the drivers and conductors or radically changing how they operate. We dubbed the solution “Lipafare” meaning ‘pay fare’. The platform has been embraced by passengers because of its ease of use, but also because it eliminates cash transactions during the COVID-19 pandemic.”

Tokhir Abdukadyrov, SVP of smart city and transport solutions at BPC: “A mobile money revolution has been happening in Kenya with the ubiquity and success of M-Pesa. The move away from cash to contactless public transport is an important part of this movement. At O-CITY, we know that innovation does not always require new technologies, but instead new ways of performing a task. By connecting our O-CITY platform to mobile wallet M-Pesa, we’re able to build a simple contactless fare solution that is familiar to the customer and likely to encourage adoption. Moreover, it enables us to scale fast to rollout the service at a time when cashless payments have a newfound importance.”

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Can companies really afford to WFH?



Can companies really afford to WFH? 3

By Carmen Ene, CEO of 3StepIT.

Firms scrambled to enable Working from Home (WFH) at the beginning of the Covid crisis, but ten months on, corporate IT strategies are becoming far more challenging as new work patterns emerge.

Recent research from 3stepIT confirms that technology investment over the next 12 months will be heavily influenced by the changes required to manage the Covid-19 pandemic and support a new-look mobile workforce.

Almost a quarter (24%) of 2019’s annual IT budget is set to be swallowed up by remote working demands. At the same time, with 29% of desktops sitting unused in deserted offices, companies are having to accelerate the retirement of IT equipment, raising serious questions regarding the security and legitimacy of asset disposal strategies.

The implications are stark: in a bid to support the requirement for flexible working, companies risk jeopardising other strategic IT investments that could be key to delivering the agility required to survive the pandemic.

As Carmen Ene, CEO at 3stepIT insists, a more affordable and sustainable technology acquisition model is required.

New Working Environment

Covid-19 has driven an acknowledged shift to WFH, but the new working environment is far more nuanced. Government policy continues to shift. Working in the office was encouraged for a few months in the bid to reinvigorate the urban economy; now we are back to WFH.  The day-to-day experience for the majority of working adults continues to chop and change.

The business implication is also varied, with companies enjoying different levels of employee productivity. According to the Office for National Statistics (ONS), while around half of companies have seen no difference in productivity, nearly a quarter said it had fallen.

Just 12% have seen an increase in productivity. The Bank of England’s Chief Economist has recently commented that WFH risks stifling creativity and cuts people off from new experiences.

Despite the challenges for businesses and employees alike, the WFH trend is set to continue. A survey from the Institute of Directors confirmed nearly three quarters (74%) of company directors plan to retain increased home-working post-coronavirus – whenever that may be.

This attitude is confirmed by research from 3stepIT which reveals 60% plan to allow employees/more employees to work from home and 56% to offer more flexible working hours.

The question for businesses then is how best to achieve this new flexible employment model, especially given the continued economic uncertainty and the many demands on the corporate budget?

IT Investment

The initial response from many companies to enable WFH was impressive – companies of every shape and size closed the doors and embraced remote interaction. Hastily allocated laptops and video calls addressed the immediate challenge.

As the pandemic rolls into month ten and many nations enter lockdown two, organisations are facing up to the reality of increased investment needed to fuel a mobile workforce for the long-term, as well as an urgent review of the temporary and emergency technology packages that were put in place to enable home working.

For many companies, this will demand a significant and unplanned upfront cost, potentially draining company cash reserves when they can least afford it.

Almost half (47%) of businesses in Europe expect to increase investment in remote working over the next 12 months, with IT strategies becoming increasingly focused on facilitating social distancing (47%) and increased home working (46%) to reflect the changing needs of employees.

Investment Model

The need to allocate investment to support a remote workforce is unquestionable. Yet there are many other immediate priorities facing IT budgets as businesses work hard to adapt to extraordinary change.

From the physical events that have gone virtual to supply chain challenges and the sheer uncertainty of demand in every market, technology has a vital role to play in enabling agile business.

The majority (61%) of IT decision-makers expect IT budgets to rise next year but with the shift to home working demanding nearly a quarter of annual budgets, funds will have to go much further than before.

How can companies support the investment in technology required to enable secure and productive remote working without compromising on short-term capital investment in essential digital transformation projects?

New thinking is required, however the value of financing rather than purchasing IT equipment outright has been proven over the past few months.

89% of companies already using finance to acquire some or all of their assets have been able to make investments in additional IT hardware to enable employees to work from home, and over half (54%) are more likely to use finance to acquire assets over the next two years.

A growing number of companies are starting to realise that access to technology is more important than ownership.

Technology Lifecycle Management

It is important to recognise, however, that finance is just part of this equation. The pandemic may have forced companies to accept flexible working on a scale previously deemed impossible, but there are still significant challenges for IT management to address.

The initial equipment acquisition is, in many ways, the easy bit. What is the strategy for remote support, which is critical if employees are to be productive? How will aged equipment be securely retired and disposed of when employees rarely, if ever, come to the office? How do you keep track of where devices are and if they’re in health?

Effective remote working requires a comprehensive Technology Lifecycle Management model that supports the business from acquisition through support to disposal.

With flexible working here to stay, IT managers have an ever increasing list of demands – and a need to demonstrate the value of every expense. The widespread adoption of WFH is not the only dramatic shift in strategic approach precipitated by Covid-19 – there has also been a change in attitude towards IT device ownership.

Focusing on providing employees with secure, effective access to technology rather than owning it, provides IT managers with a chance to not only release essential capital budget but also manage the IT lifecycle more efficiently and sustainably.

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