Tarek Elhousseiny, Visa’s general manager for North Africa and the Middle East, explains how Visa products can help in the promotion of digital payments in Egypt
We recently saw an announcement on the launch of mVisa in the Egyptian market. How would this service help drive digital payments in Egypt?
mVisa is an innovative seamless and secure mobile solution for instant cashless payments that we just launched in Egypt. mVisa brings the benefits of easy and secure digital commerce to financial institutions, merchants, and consumers, and it is expected to help accelerate Egypt’s move towards a cash-light economy. To use the solution, merchants need to register for a unique Merchant ID issued by their bank. They can display this to consumers in the form of a QR or numeric code, enabling them to accept digital payments instantly and conveniently by alleviating the need for fixed point-of-sale (POS) technology and internet connectivity. mVisa also enables merchants to access their sales and transaction history easily on their own mobile app, while payments go directly and quickly to their bank accounts. mVisa alleviates the need for POS infrastructure, as consumers can send, and merchants can receive, payments using the mobile phones they already have in their pockets. mVisa is designed to digitise everyday spending, converting everyday purchases like groceries, fuel, and bill payments to digital payments, and reducing the cash that cardholders withdraw from ATMs. This will also reduce the amount of cash that merchants handle daily. The launch of mVisa aligns with Visa’s mission to accelerate the acceptance of electronic payments in cash-dominant economies, supporting greater financial inclusion and transparency of financial transactions. The scalability and interoperability of mVisa allows these targets to be achieved in shorter timelines.
The advent of digital technologies created entirely new categories of commerce, such as eCommerce and mobile commerce, and has also created new ways to make purchases in the physical world such as tapping an NFC-enabled phone or wearable, scanning a QR code or simply clicking a button. As these and other new technologies are adopted by consumers, Visa will continue to innovate in payments so everyone has access to simple, convenient, and safe ways to pay. Whether in a store, online, or mobile phone, Visa will continue to be the engine of commerce—making it as easy to pay on any device as it is to swipe a card.
What is Visa’s financial inclusion strategy for 2017, and how does the company plan to achieve this strategy?
Visa is powered by a vision to connect people everywhere to exchange value—transcending borders, languages, and currencies. In that sense, from the very beginning, Visa has been about financial inclusion. Today—more than 55 years later—that vision is working. Visa links together more than 2.4bn accounts in more than 200 countries and territories. Our network is capable of processing 56,000 transaction messages per second for people all over the world reliably, conveniently, and securely. Now, our job is still about connecting people—and a key part of that is bringing more people into the financial system. In Egypt, we are working with government and various partners to accelerate financial inclusion. Our recent cooperation with our partners on issuing payroll cards and with the Egyptian Banking Institute to increase the awareness of payroll cardholders are a testament to that. We will continue to work with the government to identify areas where we can accelerate the conversion of cash payments to digital payments as a first step towards providing unbanked consumers with a transaction account. Visa is the platform enabling commerce. As the number of connected devices globally increases, so does our ability to support the creation of new, innovative commerce solutions. What differentiates Visa is our collaborative approach to supporting global commerce, our network capabilities, and our products and services.
How can Visa’s products and solutions play a role in achieving this strategy?
Visa has various solutions, from convenient, secure payment processing for merchants and banks to products, which enable people to conduct transactions with more security than cash. Our prepaid and debit products are highly flexible payment tools, which can be used to convert cash payments into digital form and to connect consumers and merchants to banks and vice versa. Further, while these products today come in the form of a plastic card, we plan to bring mobile solutions in 2017. As the payments industry shifts from plastic to digital, we are supporting our clients to offer consumers a safe, simple, and consistent purchasing experience, regardless of where they are and what device they are using. Visa Token Service enables financial institutions to issue tokens—essentially digital accounts that can be used for purchases online and with mobile devices. The new service can help prevent fraud by offering financial institutions, merchants, and third-party payment providers, such as digital wallet providers, a secure way to enable mobile and online payments without sharing sensitive account information.
How can all of this help SMEs and small and medium merchants?
Commerce is transforming, and Visa will continue to bring together innovative leaders from across industries to deliver the best new payment experiences. The main industries include device manufacturers, financial institutions, merchants, developers, and other members of the payments and commerce ecosystem. We have recently issued a report titled “Small Merchants, Big Opportunity: The Forgotten Path to Financial Inclusion” and this report clearly says that the benefits of accepting digital payments are not readily apparent to most medium and small merchants (MSMs). While traditional benefits such as increased sales, improved security, and reduced cash-handling costs undoubtedly apply to merchants of all sizes, most MSMs in developing countries do not see these benefits as offsetting the investment required to begin accepting digital payments. While individually these businesses are small, their influence within the global economy is significant; they transact over $6.5 trillion per year and interact with more than 4.5 billion customers every day. Because these merchants typically have thin margins, low-income customers, and small transaction values, and operate in cash-based ecosystems, little has been done to integrate them into the cashless economy. A greater level of cashless acceptance among merchants—particularly the MSMs who are vital to the daily lives of unbanked populations—would provide low-income customers with more locations to use digital payment accounts and allow those accounts to serve as a gateway to greater financial inclusion. For the merchants, too, accepting digital payments is a key step toward increasing financial sophistication and exploring new avenues for growth. As the cashless ecosystem grows in size, the benefits increase for both groups. MSMs provide a convenient place for customers to use their digital payment accounts and, therefore, a reason to keep money in the cashless ecosystem. But MSMs can also act as critical influencers of their customers and fellow merchants, as they are economic linchpins and often trusted members of their communities. Each of the 180 million MSMs across the developing world serves 25 customers every day, on average, producing up to 4.5 billion daily opportunities to interact with and educate financially underserved customers. The impact on MSMs themselves can also be significant; accepting digital payments enables merchants to establish a financial track record, thereby increasing their eligibility for more sophisticated financial services that they may need to sustain and grow their businesses.
What are your key initiatives in protecting customer data? How big is your investment at this level?
Security has always been the priority at Visa. We invest more in security than any other area of our business. Our information security programme is designed to protect Visa data across our global technology footprint and, through ongoing investments and enhancements, prevent, detect, and respond to key threats. For people, merchants, and governments to use electronic payments and enjoy their benefits, they need to trust them. That is why we invest in cutting-edge technology, recruit top talent, and collaborate with our partners to ensure people, merchants, and governments are protected every time they pay or are paid using our products, solutions, and network.
We have in place several risk-effective tools that are meant to prevent a fraud before it can happen. For example, Visa Purchase Alerts is a service offered to cardholders to receive purchase alerts either by SMS or email to track any suspicious activities on their cards.
The advancements in technology and innovation within the payments industry has meant we are able to explore new ways in which we can enhance the security and convenience of electronic payments. We launched Mobile Location Confirmation, a service that uses a Visa cardholder’s mobile as an authentication device. Mobile Location Confirmation works with mobile geo-location data in real time as an additional input into Visa’s predictive fraud analytics to more reliably predict whether it is the account holder or an unauthorized user making a payment with a Visa account. Visa has tools that produce an analysis of the account holder’s device location data, which is then matched with the transaction location in less than a millisecond, right at the point of sale. When a cardholder’s mobile device is in the same location as the payment transaction, the issuing financial institution can more confidently approve the transaction. This means cardholders who have opted-in to the service, which works both domestically and while travelling, will no longer need to call their bank to let them know when travelling.
We are also looking at ways to eliminate data from merchant systems. With the Visa Tokenization service, we are able to do just that. This new security technology from Visa replaces sensitive account information, such as the 16-digit account number, with a unique digital identifier called a token. The token allows payments to be processed without exposing actual account details that could potentially be compromised, and it can be can be used in various forms: online, in-store, or in-app.
Recently, on a global platform, Visa has developed a payment solution based on Blockchain to further secure electronic transactions, and we continue to promote habits for consumers to adopt that can help them protect themselves against hacking.
As the most trusted brand in payments, Visa authentication and risk management services allow our partners to be relentlessly focused on the security of payment data regardless of the payment form factor. Visa leads cross-industry security efforts on behalf of the ecosystem while also investing in its own capabilities. The new digital technologies efforts include geo-location, device fingerprinting, and other tools to ensure the validity of transactions and minimise risk in the payment system. In addition, some include advanced authentication capabilities, predictive analytics, and smart technologies such as chip, tokenisation, and encryption.