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How to Build More Connected & Inclusive Cities

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Carlos Menendez is president, Enterprise Partnerships, for Mastercard

By Carlos Menendez,

Carlos Menendez is president, Enterprise Partnerships, for Mastercard. In this role, Mr. Menendez is responsible for expanding the company’s operations globally with partnerships in the Smart Cities, Retail, Travel and Banking space. In this piece, he looks at ways to build more connected and inclusive cities.

When thinking about the cities of the future, I know that they will be more connected, and I strongly believe that they must be more inclusive.

We can’t have the Internet of Everything without the Inclusion of Everyone. Already today, a growing number of cities are using smart technologies to better connect people to places and to each other – and more importantly also connecting people to opportunities for better and safer lives.

Unfortunately, what still causes a significant amount of friction in our cities and prevents inclusive growth is the dominance of cash. In fact, close to 85 percent of all consumer payments in the world are still done with cash or checks.

This means that far too many people are trapped by default in an informal economy. They lack the financial services to guard themselves against risk, save for themselves, plan for their children’s futures, and build better lives.

Two years ago, Mastercard set a global goal to bring 500 million people into the financial mainstream by 2020. And we’re well on our way to doing that.

In just a few short years, we have helped connect more than 300 million people through partnerships with banks, governments, retailers, and NGOs.

We’re also working with our partners to enable and grow 40 million small merchants and micro-entrepreneurs because it’s not just individuals that are too often trapped in a cash economy – stores lose billions of dollars every year to leakage and theft.

Success Factors For Future Interconnected and Inclusive Cities

It’s no secret that the world is becoming more urban. The UN estimates that within the next generation, the number of people living in cities will jump from 50 percent today to almost 70 percent.

Already today, cities are grappling with the challenges that come with their growth. Congestion, pollution, and poverty are features of many of the world’s major cities, and it will take a collaborative effort by the public and private sector to meet these challenges.

We have seen progress, and there are some common themes around how we can leverage technologies and partnerships to move toward more connected, more inclusive cities.

Transforming Public Transportation

The key approach is to tackle those sectors in our cities that have high levels of everyday cash usage, and one of these areas is mass transit.

About 65 percent of all urban transportation is still paid in cash, which adds up in significant operational costs to transport providers and puts drivers and passengers at risk of getting robbed.

In over 100 cities around the globe (including London, Singapore, Bogota and New York), Mastercard users are paying their train or bus fare simply by tapping their card or swiping their phone.

Only a couple of weeks ago, Sydney became the first city in Australia to introduce contactless payments for public transport – no more queuing in front of tickets booths, topping up cards, or fumbling for cash.

In London, already 40 percent of daily pay-as-you-go journeys on the city’s underground, buses, and commuter rails are paid by contactless cards/phones – which has dropped Transport for London’s cost of selling tickets from 14 to 9 percent of the fare and has saved them over 100 million pounds in cash related costs.

Once payments are digitized, data insights help city governments better understand and connect with their citizens. In Chicago for example, UI LABS, is bringing technology and transportation providers together to find ways to better balance transit supply and demand across a city.

When people use their cards for public transport, this can help form a habit of paying electronically in shops and stores as well which can be a critical factor for enabling broader financial inclusion.

For instance, those living in a cash economy face significant risks when it comes to putting away money for savings. This lack of savings then makes it challenging for people to access lower priced weekly or monthly tickets, instead of more expensive daily tickets.

This is why a few weeks ago, the Government of Mexico City announced its plans to launch a debit card that can be used for both transit payments as well as every day purchases, and potentially social disbursements.

Empowering Small and Micro Businesses

Another critical angle to building more inclusive cities is to focus on the role of small businesses and how to connect them to electronic commerce.

In most parts of the world, small businesses account for well over 90 percent of all enterprises. However, small and micro entrepreneurs have historically been underserved when it comes to their ability to accept electronic payments. For a small market vendor, bigger tickets and additional sales from someone using their card instead of cash are important steps on the economic ladder, which are typically followed by better access to credit.

There are various ways to address this. One is by turning a seller’s mobile phone into a payment terminal. Masterpass QR, which is already available in eight countries in Africa and Asia, is a new electronic payment option that lets customers pay for goods and services from their mobile phones by scanning a QR code displayed at a store’s checkout.

In Kenya, Mastercard is partnering with Unilever to simplify the way smaller stores order and pay for their goods with a wholesaler.

Today, this is a very cash intensive process. Digitizing this process will give small entrepreneurs better access to funds, facilitate inventory ordering and management, and provide better sales insights about their business.

Partnering with Governments

Like businesses and individuals, governments make and receive payments. And many governments around the world choose electronic methods for things like procurement, social benefit payments, or tax collection. Electronic payments are not only more efficient and more transparent, they’re also a great way to lead by example.

At Mastercard, we have partnered with over 60 governments globally to deliver more than 1,600 scalable cashless programs in various cities and communities around the world.

In the Middle East and Africa, we have joined forces with public institutions on solutions that link a government identity with payments and enable people to become financially included on a massive scale. In Egypt, the government plans to extend financial inclusion to over 54 million citizens through a digital National ID program.

But what’s most important for many people, is that this may be the first time they see their name printed on a financial instrument. This gives them a financial identity, and it may give them the first chance to move out of the cash economy into the formal economy.

Technology as the Great Enabler

Simplifying access to public transport, empowering small and micro businesses, promoting cashless programs – what these three areas have in common is that technology works as a great enabler. While the know-how exists to solve many of the world’s most pressing problems, no one can meet these challenges on their own.

It takes partnerships across businesses, governments, NGOs and academia to advance more connected and more inclusive cities – and to build healthier, safer and more prosperous communities.

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IDC’s Framework to Accelerate Digital Transformation, Help Enterprises Turn Digital Natives

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A new research-based model launched by the International Data Corporation (IDC) is aimed at empowering organizations to break through the digital deadlock.

 

This is according to a new Digital Transformation MaturityScape Benchmark study from International Data Corporation (IDC), 59% of worldwide organizations are stuck in Stage 2 or 3 of their digital transformation.

 

 While they are running digital projects, and making progress, they are not digitally transforming their overall organization.

 

To assist organizations in this endeavour, IDC today launched a new thought leadership framework, Accelerated Pathways to Digital Transformation, designed to help enterprises make the digital transformation needed to become digital native – i.e. an organization where disruptive innovation is “business as usual.”

 

While challenges around legacy culture, process, and financial incentives have been widely identified as impediments to digital transformation, many organizations in their digital journey are also facing the following specific operational challenges: Outdated KPIs; siloed organizational structures; tactical plans; limited expertise and silos of innovation.

 

Meredith Whalen, senior vice president, IT Executive Programs, Software, Services, and Industry Research. Said “When organizations look at their individual digital programs, they may feel like they are making progress. But they need to take a step back to see whether the overall enterprise is digitally transforming. “If the answer is ‘no,’ they need to address the challenges impeding their progress.”

 

In the new framework, based on IDC’s global research with organizations undergoing digital transformation, IDC provides unique insights and recommendations on how to overcome these hurdles.

 

The new framework outlines IDC’s recommended approaches to: creating new digital KPIs; establishing an end state digital organizational structure; constructing a long-term digital roadmap; developing the most important digital capabilities and building a digital platform.

 

IDC expects it will take until 2027 for 75% of organizations to have digitally transformed.

 

There are markers along the way, which will be important for organizations to benchmark to make sure they are on track.

 

 “Over the next three years, we expect organizations will be internally focused on the systems, processes, and the culture shifts necessary to ‘get digital done.’

 

“Once organizations clear this hurdle, they will be able act like an ‘outside in’ organization that drives innovation.

 

By 2022, we predict 80% of revenue growth will depend on digital offerings and operations,” Whalen added.

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Keeping Internet Traffic Local Can Improve Nigeria’s Cyber Security-Mohammed Rudman

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By chukwuemeka fred agbata

 

All serious digitally-driven economies invest heavily in infrastructure and one critical aspect is what is known as an Internet Exchange Point, IXP, which is simply a physical infrastructure that allows the several internet provider, ISP’s and network operators to exchange traffic between their networks.

 

Nigeria also owns one, that is tasked with facilitating internet operations, localising traffic as well as reducing local internet routing costs.

 

 I recently had a chat with Mohammed Rudman, CEO, Internet eXchange Point of Nigeria and he was able to break down some of the complex, behind the scene activities that make the internet tick.

 

Mohammed stated that what happens when you visit a website from your device is that you put a name into the browser of your computer and there is a resolver that actually talks to what is called a DNS server that does the translation. “It is a series of referrals that happens from your computer to the service provider’s computers, to the entire internet computers, to get you an answer”, he stressed.

 

Mohammed further explained that behind the website you are browsing, there is what is called an IP Address. “Each computer in the world and each website in the world, has what is called an IP Address. It is a number that is hidden”, he stated. “Nigerian networks are eyeball content heavy”, he opined.

 

He explained that there are two kinds of networks on the internet. The first one is what he calls the ‘eyeball network’. These are people trying to browse or networks that have people behind them, such as MTN, Airtel, etc.  The second is content networks that have the content, such as Google, yahoo, Facebook, etc.  “Nigerian networks are eyeball content heavy”, he opined.

 

On why it is important to keep the traffic search on the internet local, Mohammed gave 5 good reasons why this should be so. The first benefit  is that Nigeria will reduce the capital flight incurred in hosting in other countries, which is in US Dollars. The second benefit is that, the reduction is capital flight will also lead to reduction in latency and cost reduction as well as higher quality of service.

 

The third advantage of hosting locally to keep the traffic local, is that it further strengthens the cyber security of the country, as passing of data through international borders is now sidetracked. The fourth advantage, according to Mohammed, is business continuity. He stated that we depend on submarine cables for hosting internationally. If a natural disaster occurs, such as a Tsunami, and damages these submarine cables, this will definitely mean a disruption in the local individual and business communication flow.

 

The fifth benefit of hosting the internet traffic search locally, is that we will gain and develop the technical skills to manage data centers to host ourselves instead of depending on other countries that host. This also, inadvertently, means the creation of more jobs for Nigerian.

 

Mohammed is of the view that we are ready to keep the traffic locally by hosting here in Nigeria, as the data centers currently have adequate infrastructure on ground to support the weight. “Most of them  also have the potentials to expand their facilities”, he observed.

 

Mohammed also explained what an Internet Exchange Point is and does. “An Internet Exchange Point, is a physical infrastructure, where all internet providers, educational institutions and any other organisations that are IP-centric that they usually, physically get connected to, so that they can exchange their traffic locally”, he stressed. He also said that a country can have as many exchange points as possible, but it has to be in a community where not less than 3 service providers are available, because they must exchange traffic.

 

On the fact that Nigeria is not playing big in content and what we can do to rectify this, Mohammed is of the view that we need to improve on our advocacy.

 

He stated that we cannot be content consumers alone, but we must also be content creators too.

 

He stated that the content that Nigerians generate are hosted outside Nigeria and in his opinion, government and other stakeholders should evolve policies that will change the ‘center of gravity of content on the internet’ from South Africa to Nigeria.

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ICANN Delays Changing Keys Protecting Domain Name System

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By peter oluka

The Internet Corporation for Assigned Names and Numbers (“ICANN”) Thursday announced that the plan to change the cryptographic key that helps protect the Domain Name System (DNS) is being postponed.

The changing or “rolling” of the key was originally scheduled to occur on 11 October, but it is being delayed because some recently obtained data shows that a significant number of resolvers used by Internet Service Providers (ISPs) and Network Operators are not yet ready for the Key Rollover.

There may be multiple reasons why operators do not have the new key installed in their systems: some may not have their resolver software properly configured and a recently discovered issue in one widely used resolver program appears to not be automatically updating the key as it should, for reasons that are still being explored.

“The security, stability and resiliency of the domain name system is our core mission. We would rather proceed cautiously and reasonably, than continue with the roll on the announced date of 11 October,” said ICANN CEO Göran Marby. “It would be irresponsible to proceed with the roll after we have identified these new issues that could adversely affect a significant number of end users.”

Changing the key, ICANN explained in an email to Nigeria CommunicationsWeek, involves generating a new cryptographic key pair and distributing the new public component to the Domain Name System Security Extensions (DNSSEC)-validating resolvers.

Based on the estimated number of Internet users who use DNSSEC validating resolvers, an estimated one-in-four global Internet users, or 750 million people, could be affected by the KSK rollover.

ICANN is reaching out to its community, Regional Internet Registries, Network Operator Groups and others to help explore and resolve the issues.

A new date for the Key Roll has not yet been determined. ICANN’s Office of the Chief Technology Officer says it is tentatively hoping to reschedule the Key Roll for the first quarter of 2018, but it will be dependent on more fully understanding the new information and mitigating as many potential failures as possible. In the meantime, ICANN remains confident in the security of the current cryptographic key and by extension, the security of the DNS.

ICANN will provide additional information as it becomes available and the new Key Roll date will be announced as appropriate.

“It’s our hope that network operators will use this additional time period to be certain that their systems are ready for the Key Roll,” said Marby. “Our testing platform (http://go.icann.org/KSKtest) will help operators ensure that their resolvers are properly configured with the new key and we will continue our engagement and communications to these operators.”

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