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Industry roundup: 29 October

BNPL, “Buy Now, Pay Later”, a Visa-based payment method solution, growing around the globe.

The concept of Buy Now, Pay Later has become increasingly popular as a type of short-term financing that allows consumers the financial convenience to make purchases and pay for them at a future date. With Visa’s latest product, Visa Installments Solution, along with their current fintech solutions, more and more issuers and acquirers are jumping on the bandwagon to offer BNPL solutions to their customers, according to Visa’s latest announcement.

“Nearly half of all global consumers (42%) expressed interest in installment financing that is offered on their existing credit card or one they could apply for”, according to a statement made by Visa. As demand continues to grow, Visa Installment Solutions is seeing global deployment, making issuer-offered BNPL options available across ecommerce channels and in stores.

How does this work? There is feature that enables financial institutions to add BNPL for approved credit card holders. BNPL is a network-based solution that enables installment activation between acquirers and retailers that accept the Visa card.

Visa’s current products complement the global rollout of Visa’s Installments Solution. According to Visa, their fintech solutions have helped fintechs grow by issuing virtual cards, expanding its footprint due to Visa’s already wide acceptance, and offering security and risk parameters.

Mary Kay Bowman, SVP and Global Head of Payment and Platform Products, Visa, stated their goal is to continue to expand by offering shoppers and banks the convenience of BNPL.

Reinforcing Visa’s recent survey, the future interest in installment plans is high and shows a strong opportunity for BNPL usage in years to come. In addition, retailers benefit in consumer spending, as the research has shown that when BNPL options are available at checkout, more shoppers have ease and convenience in their purchases.

Offering BNPL makes HSBC the first bank outside North America to launch the Visa Installments Solution. Madhu Kejriwal, Group Head, Unsecured Lending & Partnerships, HSBC Wealth & Personal Banking also stated, “This feature facilitates point of sale purchases for HSBC Visa credit card customers when they shop with partner merchants, by allowing them to split payments into monthly installments at no additional cost and no credit application.”

As business to business commerce continues to evolve, solutions like BNPL have emerged as a “must-have capability for both card issuers and merchants across the globe” according to Ava Kelly, Global Head of Products of Silicon Valley-based i2c, a global Visa Ready and Fast Track member.

For more information on Visa Installments, visit: https://usa.visa.com/partner-with-us/payment-technology/installments.html

Ransomware attacks continue

Millions of dollars were frozen whenPapua New Guinea, the second largest island in the world and located in the southwestern Pacific Ocean on the eastern half of New Guinea, was attacked by ransomware. According to Bloomberg reports, “Papua New Guinea’s finance department acknowledged late Thursday that its payment system, which manages access to hundreds of millions of dollars in foreign aid money, was hit with a ransomware attack.”

A statement released by John Pundari, Finance Minister and Acting Treasurer, said “the attack on the Department of Finance’s Integrated Financial Management System (IFMS) occurred at 1 a.m. local time on Oct. 22.  The Pacific nation’s budget and accounting for all tiers and department of government are consolidated onto a platform of IFMS, which controls access to funds for the government.”The system has been fully restored, but, because of the inherent risk, they are not allowing full usage of the affected network, said Pundari. In addition, all government departments and agencies are under strict guidelines to process checks in a secured environment through a controlled temporary arrangement. Pundari said,“the finance department did not pay any ransom to any hacker or third party and insisted the government’s financial system has been fully restored.”

According to the relevant personnel, the attackers demanded Bitcoin in ransom. Furthermore, the attackers had requested anonymity to discuss confidential government affairs and did not disclose the amount of Bitcoin requested.Papua New Guinea’s data security personnel stated that the government’s network systems do have critical vulnerabilities and the servers have exposure. 

This vulnerability would have allowed the attackers to breach networks.Bottom of FormHackers typically encrypt a victim’s computer files and demand payment to unlock it in these types of ransomware attacks. These attacks have been rapidly increasing around the world to many different sectors.

According to the press release, “the government has been heavily reliant on its partners in the region for economic and technological assistance”. Papua New Guinea’s financial issues have deterred them from creating a robust cybersecurity environment according to Jonathan Pryke, director of the Sydney-based Lowy Institute’s Pacific Islands Program.

Rapid transformation of artificial intelligence “AI”

A report by the Hong Kong Institute for Monetary and Financial Research (HKIMR), the research segment of the Hong Kong Academy of Finance (AoF), describes the transformation of the financial services industry using artificial intelligence (AI) and big data (BD) technologies. It also discusses the important connection between highly trained personnel and the newer technologies as a key driver in the financial services industry’s core business functions. In addition, the report provides real-time views from market participantson fostering the new technology and the high demand for qualified personnel in AI/BD, specifically in major Asia-Pacific financial centers.

According to the research findings, “71% of firms across sectors of the financial services industry in the region have either adopted or planned to adopt AI/BD technologies in the next 12 months.” Benefits from AI/BD adoption were clearly identified by market participants. However, the shortage of talented individuals is one of the key challenges faced currently and in the future.The recommendations on bolstering highly skilled individuals by the participants of the survey are included along with initiatives developed internationally. The conclusion of the report focused on building up and narrowing the gap of the skilled workforce while strategizing ways to develop, recruit and maintain the talent required to meet the increasing advancements in technology.

Mr. Edmond Lau, Deputy Chief Executive of the Hong Kong Monetary Authority and Deputy Chairman of the HKIMR, stressed that “professionals well versed in both finance and AI/BD technologies” will be critical in the next two years. The speed and need for integration between business and technology functions is growing rapidly in the industry.

The full report is available on the AoF/HKIMR website.

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