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Reality Check: Will passwords become extinct in the world of e-commerce?



Reality Check: Will passwords become extinct in the world of e-commerce?

Those who are said to be dead live longer and interestingly, this also applies to passwords. This established form of authentication has long been considered an anachronism to the constant evolution and modernisation of the Internet.

However, passwords still play a very large part in our online world and are the gateway to a whole host of activities including emails, social networks and last but not least, online shopping.

Even those who only use the internet occasionally for online shopping quickly accumulate a wealth of online accounts.

Although there are ways of logging in via third-party providers such as Google or Facebook, they no longer enjoy the unconditional trust of users following a number of highly publicised data scandals.

With the new FIDO2 open authentication standard, it is now possible, in principle, to use hardware tokens or biometric features for authentication directly via a browser. But what is behind the process and what potential does the technology have?

Urs Gubser, Head e-commerce strategy at SIX Payment Services provides a reality check.

Check 1: What exactly is FIDO2 and what concrete possibilities does it present?

The abbreviation actually hides two standards. One, WebAuthn, was developed by the FIDO Alliance (Fast Identity Online) in collaboration with the W3C (World Wide Web Consortium) organisation. It enables the integration of FIDO-based authentication methods directly into different browsers using a standardized API. Mozilla’s Firefox already supports WebAuthn from version 60 and Microsoft and Google plan to follow suit. The other part of FIDO2 is the Client to Authenticator Protocol (CTAP). This allows various external devices to transmit credentials to computers via Bluetooth, NFC or USB.

The new standard offers several ways to replace passwords. A USB stick as a hardware token is a form of digital key. When a user inserts the stick into their PC, they automatically authenticate, just as easy as unlocking a door. In addition, the technical capacities of smartphones can also be exploited as many of today’s devices already have fingerprint recognition capability which could also use this unique feature for authentication.

Check 2: What about safety?

You do not have to be an accomplished computer hacker to crack a password; many people still use very easy-to-guess character combinations like names and birthdays. In addition,

SIX Payments Services Ltd Hardturmstrasse 201 P.O. Box 1521 CH-8021 Zurich

criminals have access to a variety of software tools to help them find out passwords. These risks and potential breaches in security simply do not exist with a hardware token – however, it can be lost or stolen, just like a physical key.

Is the fingerprint the ID of choice? After all, it is unique with just one per person. That is of course unless someone makes a copy and manages to fool the sensor – which is exactly what the Chaos Computer Club did back in 2013.

Since then, detection technology has evolved but so have the methods to outsmart it. With the help of machine learning and artificial intelligence, American security experts last year managed to create a form of the master imprint that unlocked almost two out of three of the smartphones that were tested. A potential attacker using this approach does not even need the original print of the owner. Therefore, in the case of biometric authentication, the question that always comes up is whether it is possible for criminals to obtain copies of the features. Of course, unlike a password, you cannot easily reset your fingerprint. Currently, a 100% secure system does not exist, even in the digital world, but you can make it as difficult as possible for cybercriminals to undertake their activities.

This is best achieved by combining various security features. Fingerprint authentication can be combined with the voice check and an iris scan as further biometric security elements, or you can use a hardware token as an extra authentication check. With each additional step of a multifactor authentication process, the security increases. Whilst this does not completely eliminate the possibility of identity theft, it sets the barriers very high. Breaches become extremely unlikely while at the same time the process remains easy for the end user.

Check 3: What else will the retail sector be facing?

As passwords disappear, online shopping becomes easier and more intuitive for customers. Of course, it also benefits sellers. Retailers no longer have to reset passwords and can make more meaningful use of the resources they no longer need. Biometric methods are also particularly interesting for the simplification of 3-D Secure. In addition to the normal credit card data, this service often requires customers to provide an additional password, which results in many customers not completing the journey and abandoning their purchase. When using identity verification procedures that do not require a password, companies no longer have to forego these transactions.

For customers, it is now self-evident that shops accept different credit cards, whilst at the same time PayPal is moving further and further into the retail space. Their competitor in the Far East, Alipay, is already on the rise beyond China. As the market for e-payment solutions develops, biometric methods are very likely to replace passwords, making it difficult to predict whether established service providers will be able to expand their market share, or whether new innovators will emerge and take a slice of the pie.

Be prepared for everything

One thing is certain; digitisation will not be reversed and is here to stay. Financial transactions are definitely affected by this megatrend. Developments such as the Internet of Things (IoT) offer a completely new perspective where every networked device can also be a retail gateway. In this new and connected world, customers want to pay directly and conveniently which will lead to the development of a veritable and comprehensive Internet of Payments. Methods of multi-factor authentication, including those based on biometrics, can help make the online retail environment more secure and eliminate the fears of potential users.

In order not to be overrun by e-payment developments, merchants should rely on the help of a service provider who has future-oriented solutions in place that can be integrated with existing systems so they are well prepared for a fully networked future without the nuisances of passwords.


Exclusive: China’s Huawei, reeling from U.S. sanctions, plans foray into EVs – sources



Exclusive: China's Huawei, reeling from U.S. sanctions, plans foray into EVs - sources 1

By Julie Zhu and Yilei Sun

HONG KONG/BEIJING (Reuters) – China’s Huawei plans to make electric vehicles under its own brand and could launch some models this year, four sources said, as the world’s largest telecommunications equipment maker, battered by U.S. sanctions, explores a strategic shift.

Huawei Technologies Co Ltd is in talks with state-owned Changan Automobile and other automakers to use their car plants to make its electric vehicles (EVs), according to two of the people familiar with the matter.

Huawei is also in discussions with Beijing-backed BAIC Group’s BluePark New Energy Technology to manufacture its EVs, said one of the two and a separate person with direct knowledge of the matter.

The plan heralds a potentially major shift in direction for Huawei after nearly two-years of U.S. sanctions that have cut its access to key supply chains, forcing it to sell a part of its smartphone business to keep the brand alive.

Huawei was placed on a trade blacklist by the Trump administration over national security concerns. Many industry executives see little chance that blocks on the sale of billions of dollars of U.S. technology and chips to the Chinese company, which has denied wrongdoing, will be reversed by his successor.

A Huawei spokesman denied the company plans to design EVs or produce Huawei branded vehicles.

“Huawei is not a car manufacturer. However through ICT (information and communications technology), we aim to be a digital car-oriented and new-added components provider, enabling car OEMs (original equipment manufacturers) to build better vehicles.”

Huawei has started internally designing the EVs and approaching suppliers at home, with the aim of officially launching the project as early as this year, three of the sources said.

Richard Yu, head of Huawei’s consumer business group who led the company to become one of the world’s largest smartphone makers, will shift his focus to EVs, said one source. The EVs will target a mass-market segment, another source said.

All the sources declined to be named as the discussions are private.

Chongqing-based Changan, which is making cars with Ford Motor Co, declined to comment. BAIC BluePark did not respond to repeated requests for comment.

Shares of Changan’s main listed company Chongqing Changan Automobile rose 8% after Reuters reported the discussions. BluePark’s shares jumped by their maximum 10% daily limit.


Chinese technology firms have been stepping up their focus on EVs in the world’s biggest market for such vehicles, as Beijing heavily promotes greener vehicles as a means of reducing chronic air pollution.

Sales of new energy vehicles (NEVs), including pure battery electric vehicles as well as plug-in hybrid and hydrogen fuel cell vehicles, are expected to make up 20% of China’s overall annual auto sales by 2025.

Industry forecasts put China’s NEV sales at 1.8 million units this year, up from about 1.3 million in 2020.

Huawei’s ambitious plans to make its own cars will see it join a raft of Asian tech companies that have made similar announcements in recent months, including Baidu Inc and Foxconn.

“The novel and complicated U.S. restrictions on semiconductors to Huawei have slowly been strangling the company,” said Dan Wang, a technology analyst with research firm Gavekal Dragonomics.

“So it makes sense that the company is pivoting to less chip-intensive industries in order to maintain operations.”

In the United States, Inc and Alphabet Inc are also developing auto-related technology or investing in smart-car startups.

Huawei has been developing a swathe of technologies for EVs for years including in-car software systems, sensors for automobiles and 5G communications hardware.

The company has also formed partnerships with automakers such as Daimler AG, General Motors Co and SAIC Motor to jointly develop smart auto technologies.

It has accelerated hiring of engineers for auto-related technologies since 2018.

Huawei was awarded at least four patents related to EVs this week, including methods for charging between electric vehicles and for checking battery health, according to official Chinese patent records.

Huawei’s push into the EV market is currently separate from a joint smart vehicle company it co-founded along with Changan and EV battery maker CATL in November, two of the sources said.

(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; additional reporting by David Kirton in Shenzhen; Editing by Sumeet Chatterjee and Richard Pullin)

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Facebook switches news back on in Australia, signs content deals



Facebook switches news back on in Australia, signs content deals 2

By Renju Jose and Jonathan Barrett

SYDNEY (Reuters) – Facebook Inc ended a one-week blackout of Australian news on its popular social media site on Friday and announced preliminary commercial agreements with three small local publishers.

The moves reflected easing tensions between the U.S. company and the Australian government, a day after the country’s parliament passed a law forcing it and Alphabet Inc’s Google to pay local media companies for using content on their platforms.

The new law makes Australia the first nation where a government arbitrator can set the price Facebook and Google pay domestic media to show their content if private negotiations fail. Canada and other countries have shown interest in replicating Australia’s reforms.

“Global tech giants, they are changing the world but we can’t let them run the world,” Australian Prime Minister Scott Morrison said on Friday, adding that Big Tech must be accountable to sovereign governments.

Facebook, whose 8-day ban on Australian media captured global attention, said it had signed partnership agreements with Schwartz Media, Solstice Media and Private Media. The trio own a mix of publications, including weekly newspapers, online magazines and specialist periodicals.

Facebook did not disclose the financial details of the agreements, which will become effective within 60 days if a full deal is signed.

“These agreements will bring a new slate of premium journalism, including some previously paywalled content, to Facebook,” the social media company said in a statement.

The non-binding agreements allay some fears that small Australian publishers would be left out of revenue-sharing deals with Facebook and Google.

“It’s never been more important than it is now to have a plurality of voices in the Australian press,” said Schwartz Media Chief Executive Rebecca Costello.

Facebook on Tuesday struck a similar agreement with Seven West Media, which owns a free-to-air television network and the main metropolitian newspaper in the city of Perth.

The Australian Broadcasting Corp has said it was also in talks with Facebook.

Google Australia managing director Mel Silva said in a statement published on Friday the company had found a “constructive path to support journalism”.

She thanked Australian users of the search engine for “bearing with us while we’ve sent you messages about this issue”.

Facebook and Google threatened for months to pull core services from Australia if the media laws, which some industry players claim are more about propping up ailing local media, took effect.

While Google struck deals with several publishers including News Corp as the legislation made its way through parliament, Facebook took the more drastic step of blocking all news content in Australia.

That stance led to amendments to the laws, including giving the government the power to exempt Facebook or Google from mandatory arbitration, and Facebook on Friday began restoring the Australian news sites.

(Reporting by Renju Jose and Jonathan Barrett; Editing by Richard Pullin and Jane Wardell)


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China’s factory activity growth likely moderated during February holiday lull – Reuters poll



China's factory activity growth likely moderated during February holiday lull - Reuters poll 3

BEIJING (Reuters) – China’s factory activity likely grew at a slightly slower rate in February as factories closed for the Lunar New Year holiday, a Reuters poll showed, although growth is expected to remain firm, buoyed by an early resumption of production.

The official manufacturing Purchasing Manager’s Index (PMI) is expected to dip marginally to 51.1 in February from 51.3 in January, according to the median forecast of 20 economists polled by Reuters. A reading above 50 indicates an expansion in activity on a monthly basis.

Chinese factories typically scale back operations or close for lengthy periods around the Lunar New Year holiday, which fell in the middle of February this year.

However, the resurgence of COVID-19 cases in the winter had prompted local governments and companies to dissuade workers from travelling back to their hometowns, giving a boost to the earlier-than-usual resumption of production at many factories, analysts say.

“Although government COVID-19 prevention measures may constrain some manufacturing activities in the near-term, the fact that a majority of migrant workers stayed in their workplace cities for the holiday should facilitate an earlier resumption of business activity following the holiday this year,” said analysts at Nomura in a note to client on Thursday.

Wang Zhishen, a migrant worker from Gansu, told Reuters that his factory, a manufacturer of logistics boxes in the manufacturing hub of Dongguan, only closed for three days during the holiday, thanks to overwhelming businesses. Lured by the 1,500-yuan cash subsidy his factory offered, he chose to work through the holiday.

The Chinese economy has largely shaken off the gloom from the COVID-19 health crisis, with consumers opening up their wallets after months of hesitation. Growth is now set to rebound sharply this quarter, also helped by the low base effect of a year ago.

The country has successfully curbed the domestic transmission of the COVID-19 virus in northern China, with the national health authority reporting zero new local cases for the 11th straight day. Cities that were on lockdown have since vowed to push for a work resumption at full speed.

The official PMI, which largely focuses on big and state-owned firms, and its sister survey on the services sector, will both be released on Sunday.

The private Caixin manufacturing PMI will be published on Monday. Analysts expect the headline reading will dip slightly to 51.4 from 51.5 in January.

(Reporting by Stella Qiu and Ryan Woo; Editing by Sam Holmes)

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