The Senior Director in Digital Solutions for Visa, Geraldine Mitchley, who is based in Johannesburg, South Africa, in this interview, spoke on the benefits of the Visa Everywhere Initiative that was recently launched in Africa and how African countries could take advantage of the initiative to boost technology innovation and start-ups. Emma Okonji presents the excerpts:
Given the advancement of technology in developed countries, especially in the digital transaction space, what is your projection of the African digital market in the next two years?
The sub-Saharan Africa Market has already shown great interest in digital solutions with the region leading the penetration of smart phones market and mobile money. There is significant growth in the uptake of smart phones where there is great penetration of the mobile money and gradually e-commerce too. According to the Mobile Money Economy Report in 2017, Nigeriaâ€™s mobile penetration increased from 53 per cent in 2016 to 84 per cent in 2018. With 40 per cent of Africaâ€™s e-Commerce ventures located in the country, Nigeria is where most of the continentâ€™s e-Commerce start-ups are located, followed by South Africa and Kenya who also have developed e-Commerce markets. It is expected for the market to steadily grow not in large percentage, but grow in interest, flexibility and loyalty in digital solutions. We also expect a pick-up in innovative fintech solutions as market continues to grow.
Today, global economies are leveraging on Artificial Intelligence (AI), Virtual Reality (VR) and Internet of Things (IoTs) to drive engagement in the digital space. Do you think the African market is ripe for this innovation, given the poor state of infrastructure across several African markets?
AI or VR is slowly getting into the African market, but poor infrastructure and internet access remain the biggest challenges within African markets. The African market is ripe for innovation and weâ€™ve seen what technology can do to improve lives across different consumer segments across the continent. Data and predictive analytics provides the opportunity to share and empower value added services from our clients to their consumers and more importantly in the moment that they need them. When It comes to IoT, we are excited about the possibilities as it means digitally connected access to funds can flow between buyers and sellers without the restrictions of the past such as plastics and point of sales and branches or shops. Today in Nigeria we support many such examples such as enabling mobile to mobile transactions, and globally have rolled out many IoT innovations such as enabling the connected home, car, stadium, events, parking and more.
Technology start-up businesses in Nigeria are on the increase but they are faced with challenges such as access to funding, access to investors and mentors, as well as infrastructure challenges. How will the Visa Everywhere Initiative programme help to address these challenges?
Capital is one of the biggest challenges faced by every start-up, as well as the empowerment and skills needed in running a business. Through the Visa Everywhere Initiative, VisaÂ is committed to rewarding the winner of each brief, the sum of $25,000 and providing them with best practice and access to a network of innovators and industry mentors. Winners of the prize will also be invited to a working meeting with Visa and may be presented with the opportunity to create a prototype. Visa will then select one overall winner to receive an additional $25,000. Other benefits for the winning start-ups also include digital commerce training and expert support from Visa and exposure to the issuer and merchant ecosystem. Start-ups will be exposed to information, be trained and acquire the skills needed to run their business efficiently and profitably.
Innovation is key for technology start-ups. How will this initiative encourage innovation in the e-commerce space?
The fintech industry in the sub-Sahara Africa region is on the brink of a transformative breakthrough and now is the time to tap into the creative and innovative minds of the start-up community. Visa is calling on fintech start-ups to develop local solutions as per the assigned briefs which were purposely designed with local challenges in mind â€“ and these three briefs include: How can your start-up leverage Visa Developer APIs to either enable smaller merchants to accept payments in-store digitally or Provide a safe and secure solution for online merchants to drive eCommerce and reduce cash on delivery?
How can your company use Visaâ€™s APIs to leverage mass reach partner platforms like Facebook to help businesses operating in fast-paced consumer centric environments improve cash flow and receive payments? How can your start-up leverage technology to provide services that are functional for illiterate customers to provide them with secure transaction experiences that build and enhance their confidence in the banking system? Each participantsâ€™ entry will be valid once they have taken on one of the briefs and actively innovated solutions to that specific brief.
Has the initiative been deployed in other regions? If yes, how successful is it in those regions and if no, what are the plans to launch the initiative in several regions of the world?
Yes, the initiative was launched for the first time three years ago and has been implemented inÂ North America, Latin America, Europe and Asia. Since its inception in 2015 the initiative has awarded over $1 million and mentorship to 36 winners selected from over 130 finalists in over 40 countries in those different regions. Over all, more than 2100 start-ups globally have participated in the programme.
E-commerce is an emerging market in Nigeria and it is gradually changing the perception of buyers from shopping in physical markets to online shopping.
As a company investing in technology how will Visa assist to further drive e-commerce business in Nigeria?
Part of Nigeriaâ€™s e-Commerce market challenges are the consumers’ lack of trust in online shopping platforms and internet accessibility challenges. Consumer trust can be learned through empowering customers with the knowledge to allow them to understand the systems and methods they use when using e-Commerce platforms. Safety awareness information also needs to be shared so that shoppers know what steps they need to take in order to protect themselves from fraud. Visa focuses on solutions that would be of benefit to consumers, businesses and governments â€“ensuring a holistic it solution for all parties involved. Accessibility to smartphones has also increased the accessibility to internet. Visa is actively working on implementing digital payment solutions that are easily implemented and an example is M-Visa which is a mobile money transfer facility.
What is Visa doing to address the risks associated with electronic transactions in the digital era?
As a payment solutions company part of Visaâ€™s core purpose is to ensure transactions are completed simply and safely. The main risk of electronic transaction is the increase of fraud as smarter systems are developed. There is, however, a greater risk in physical cash transaction which can result in robberies and cash is difficult to track. This is the reason Visa continues to invest in digital systems that are both seamless and secure; convenient and safe; and also guarantee that your money goes where it belongs during digital transactions.
What in your view could be responsible for the growth in electronic transactions globally and how can the trend be sustained in the Nigerian market?
According to the EIU report, Â Nigeria is the most promising country in the region in terms of it is business environment opportunity potential. Smartphones are a gateway to the internet for Africa, especially in Nigeria, where the mobile penetration is estimated to rise from 103 per 100 in 2016 to 122 per 100 in 2021.Â The Nigerian market is already part of the leading mobile money markets in sub-Saharan Africa and there is an even greater opportunity to harness the interest in the market by empowering them with more localised innovations. The trend can be sustained through the development of solutions that speak directly to Nigeriaâ€™s electronic transaction habits and patterns, and for developers to solve for local payments challenges using the most available platforms such as mobile devices and electronics.
With the exponential growth in global adoption of digital payments, what is Visa doing to protect online transactions from hacking?
VISA is constantly working to simplifying payment process and ensuring both the merchants and consumers have a pleasant shopping experience that is safe for everyone too. According to Visaâ€™s recent research, Â Cashless Cities, realising the benefits of digital payments, consumers across the 100 cities could achieve nearly $28 billion per year in estimated direct net benefits from cashless transactions. This impact would be derived from factors including up to 3.2 billion hours in time savings conducting banking, retail and transit transactions, in addition to a reduction in cash-related crime Visa also has the VISA checkout which is an online payments feature that makes online shopping more convenient and safer. This e-Commerce allows shoppers at checkout, to enter their username and password to make their online shopping experiences easier with a single account that can be used across all devices. This reduces chances of criminals copying the password while one types it into key board and personal devices will be ready for purchase all the time. This is an example of one of concepts aimed making digital payment safe and convenient for all.
Most financial fraud in the digital payment space have been traced to insider connivance. How in your views can the insider challenge be mitigated?Â
Implemented policies and standards related to enforced tightly controlled segregation of roles and encrypted data storage such PCI DSS certification as well as implementing strong customer authentication such as 3DS, are tools that have significantly helped to overcome these occurrences. The biggest evolution, however, to combat and address payment credential data breaches is managed via tokenisation Â available via the Visa token services. This means that while we continue to ensure we keep it simple for consumer to make a payment, the backend technology has significantly enhanced where we use tokenisation to devalue the data at any point in time and lock it down to its’ restricted use only. Thus, if the data is intercepted, it is rendered useless to re-use for any fraudster.
Government policies across regions could make or mar the growth of digital transactions. What kind of government policies and implementation do you expect from the Nigerian government to boost digital transaction in the country?
The biggest challenge in newly implemented policies would be restriction of innovation. While there is no guaranteed partnership with government, Visa Everywhere Initiative is aimed at being a contribution to solving the growing unemployment challenge throughout the sub-Saharan Africa region. Fintech start-ups which are usually desperate for capital are given an opportunity to showcase their models and solutions and possibly solve a bigger financial challenge and help raise funds for their businesses. As a result of the programme, the start-ups have collectively raised over $2 billion in funding since the inception of the initiative. According to Visaâ€™s research, Â realising the benefits of digital payments cashless cities could support up to five million jobs over 15 years. Governmentâ€™s benefits in the implementation of digital payment process will include savings from more efficient governmentâ€™s processes, increased tax revenues from recaptured informal economy and lower costs of managing cash while enhancing the quality of life for citizen. Digital transactions are beneficial to governments and Visa is willing to be working with all governments to ensure that governments benefit from digital transformation.