A revolution is underway in the global payments infrastructure and that makes it a necessity to re-design systems to keep up with the “payments Joneses”
According Chris Hamilton, new chief executive officer of BankservAfrica, speaking at the recent Payments Association of South Africa (PASA) International Payments Conference 2016, discussions about payments infrastructure design are like discussions about plumbing and sewerage: “We all really need it but we don’t want to spend a lot of time talking about it.”
He described streamlining the payments industry as being “like herding cats”.
Hamkilton was chief executive of the Australian Payments Clearing Association Limited (APCA) for the past 10 years, allowing him insight into the approaches of different markets when redesigning payments to keep up with the demands of business and consumers.
“As an industry, we need to find a way to talk about this needed, fundamental change and do so systematically. System design doesn’t happen by itself, it needs intense collaboration.”
“To meet the future payment needs of our community and our economy, payments businesses need to approach payment system modernisation empirically, inclusively, holistically but above all collaboratively. The design process really matters.”
Payments systems vary between and even within countries. They are complex, and serve different agendas and business needs. One only has to look at the variation from PayPal to Bitcoin, Visa to Mastercard; and the range of secure options offered by individual banks.
Given the complexity, infrastructure redesign is costly, complicated and highly contentious, and thus only takes place every 20 or 30 years.
“The time for a new South African design, however, is now,” says Hamilton. “Otherwise, the SA economy will not have the basic plumbing it needs for the future. The world is undertaking a step-change in national payments infrastructure, from overnight batch with basic data to real-time, data-rich, flexible and layered. South Africa must join the trend, or be left behind.
“In doing this, all the hard questions are not technological, they are social and political. What will our users and our economy need in 10 years’ time? How do we resolve all the competing business and political agendas to make sure they get it? What is the role of the national regulator? There is much to learn from mistakes and successes overseas.”
Hamilton talked the delegates through various global “adventures in international payments modernisation, looking at what the United Kingdom, Canada, Australia and the United States of America have done towards renewing their payments infrastructure.
The results, he says, show the intricacies and difficulty in getting all parties – and agendas – synchronised.
“Since time immemorial, we have been expecting our customers to adapt the way they pay to our available ‘set of rails’. So if you want to buy something at the shop, you get out your card; if a business wants to pay a supplier, it must do so by scheduling a payment with its bank or, heaven forbid, write out a cheque the supplier must then present to another bank. There is nothing wrong with this; it is just the way the world looks right now. But will this do for the digital economy of the future where other aspects of our lives are fully online, real time and automated?
“We need to start thinking creatively now because new systems take a very long time to develop – at a minimum five years. This is not because of the technology; it’s because of all the competing business and policy interests. We must work out how our payment system is going to be used in 10 years’ time.”
This approach calls for a rigorous, inclusive process. The USA – the world’s largest and complex payment market – is the least designed because it is just too big. There are 13 000 payment institutions with millions of interested parties.
“The Federal Reserve Bank has taken on the job of trying to rationalise the USA’s payment system. They have in the last two years published their own consultation papers and received thousands of responses. They put together a task force of 300 people – made up of consumer and business representatives, service providers, consultants, and banks – to have a massive, industry-wide discussion happening in a public way.”
Australia’s New Payments Platform (NPP) felt like an overnight success because, in 2013, the Central Bank came out with a strategic review that compelled the industry to build a real-time payment system, he said. But the industry had already done most of the thinking work, starting in 2008. So the payments community was able to put together a well-designed proposal very quickly.
“So in 6 months we actually put together a community of bankers and published a proposal for a real time payment system which became the new payments platform.
“My view of the world is that, there is no substitute for the industry players doing it themselves, together. I’m accustomed to hearing, over my 15 year career in this game, banks saying: ‘We don’t like to work with other banks because it’s too high risk and never works.’ Yes it is high risk, but also high return. Co-created networks are always better than government-built networks or compliance-driven outcomes. Only the participants know how the whole thing really works.”
The base of good payment systems is empirical research that is “inquisitive, inclusive, and intentional,” plus gets business to lead.
“Streamlining the payments industry is still like herding cats. But a business-led process can be powerful and galvanising. It can also radically reduce the cost base, while revolutionising the industry.”
Earth 2050: memory chips for kids, telepathy for adults
An astonishing set of predictions for the next 30 years includes a major challenge to the privacy of our thoughts.
By 2050, most kids may be fitted with the latest memory boosting implants, and adults will have replaced mobile devices with direct connectivity through brain implants, powered by thought.
These are some of the more dramatic forecasts in Earth 2050, an award-winning, interactive multimedia project that accumulates predictions about social and technological developments for the upcoming 30 years. The aim is to identify global challenges for humanity and possible ways of solving these challenges. The website was launched in 2017 to mark Kaspersky Lab’s 20th birthday. It comprises a rich variety of predictions and future scenarios, covering a wide range of topics.
Recently a number of new contributions have been added to the site. Among them Lord Martin Rees, the UK’s Astronomer Royal, Professor at Cambridge University and former President of the Royal Society; investor and entrepreneur Steven Hoffman, Peter Tatchell, human rights campaigner, along withDmitry Galov, security researcher and Alexey Malanov, malware analyst at Kaspersky Lab.
The new visions for 2050 consider, among other things:
- The replacement of mobile devices with direct connectivity through brain implants, powered by thought – able to upload skills and knowledge in return – and the impact of this on individual consciousness and privacy of thought.
- The ability to transform all life at the genetic level through gene editing.
- The potential impact of mistakes made by advanced machine-learning systems/AI.
- The demise of current political systems and the rise of ‘citizen governments’, where ordinary people are co-opted to approve legislation.
- The end of the techno-industrial age as the world runs out of fossil fuels, leading to economic and environmental devastation.
- The end of industrial-scale meat production, as most people become vegan and meat is cultured from biopsies taken from living, outdoor reared livestock.
The hypothetical prediction for 2050 from Dmitry Galov, security researcher at Kaspersky Lab is as follows: “By 2050, our knowledge of how the brain works, and our ability to enhance or repair it is so advanced that being able to remember everything and learn new things at an outrageous speed has become commonplace. Most kids are fitted with the latest memory boosting implants to support their learning and this makes education easier than it has ever been.
“Brain damage as a result of head injury is easily repaired; memory loss is no longer a medical condition, and people suffering from mental illnesses, such as depression, are quickly cured. The technologies that underpin this have existed in some form since the late 2010s. Memory implants are in fact a natural progression from the connected deep brain stimulation implants of 2018.
“But every technology has another side – a dark side. In 2050, the medical, social and economic impact of memory boosting implants are significant, but they are also vulnerable to exploitation and cyber-abuse. New threats that have appeared in the last decade include the mass manipulation of groups through implanted or erased memories of political events or conflicts, and even the creation of ‘human botnets’.
“These botnets connect people’s brains into a network of agents controlled and operated by cybercriminals, without the knowledge of the victims themselves. Repurposed cyberthreats from previous decades are targeting the memories of world leaders for cyber-espionage, as well as those of celebrities, ordinary people and businesses with the aim of memory theft, deletion of or ‘locking’ of memories (for example, in return for a ransom).
“This landscape is only possible because, in the late 2010s when the technologies began to evolve, the potential future security vulnerabilities were not considered a priority, and the various players: healthcare, security, policy makers and more, didn’t come together to understand and address future risks.”
For more information and the full suite of inspirational and thought-provoking predictions, visit Earth 2050.
How load-shedding is killing our cellphone signals
Extensive load-shedding, combined with the theft of cell tower backup batteries and copper wire, is placing a massive strain on mobile network providers.
MTN says the majority of MTN’S sites have been equipped with battery backup systems to ensure there is enough power on site to run the system for several hours when local power goes out and the mains go down.
“With power outages on the rise, these back-up systems become imperative to keeping South Africa connected and MTN has invested heavily in generators and backup batteries to maintain communication for customers, despite the lack of electrical power,” the operator said in a statement today.
However, according to Jacqui O’Sullivan, Executive: Corporate Affairs, at MTN SA, “The high frequency of the cycles of load shedding
An additional challenge is that criminals and criminal syndicates are placing networks across the country at risk. Batteries, which can cost R28 000 per battery and upwards, are sought after on black markets – especially in neighbouring countries.
“Although MTN has improved security and is making strides in limiting instances of theft and vandalism with the assistance of the police, the increase in power outages has made this issue even more pressing,” says O’Sullivan.
Ernest Paul, General Manager: Network Operations at SA’s leading network provider MTN, says the brazen theft of batteries is an industry-wide problem and will require a broader initiative driven by communities, the private sector, police and prosecutors to bring it to a halt.
“Apart from the cost of replacing the stolen batteries and upgrading the broken infrastructure, communities suffer as the network degrades without the back-up power. This is due to the fact that any coverage gaps need to be filled. The situation is even more dire with the rolling power cuts expected due to Eskom load shedding.”
Loss of services and network quality can range from a 2-5km radius to 15km on some sites and affect 5,000 to 20,000 people. On hub sites, network coverage to entire suburbs and regions can be lost.
Click here to read more about efforts to combat copper theft.