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Understanding the Risks of Insecure Payment Processing

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By Gideon Ayogu

Businesses across the world are losing customers and huge sums due to a rise in payment fraud in the last few years. A recent report highlights an alarming 88% global increase in payment fraud between December 2021 and March 2023.  In an ever-evolving digital world, payment processing is at the heart of every business transaction. However, each transaction carries significant risks that must be effectively managed and mitigated. Consequently, ensuring robust security in payment processing has never been more critical.

With the increasing sophistication of payment fraud, many businesses are becoming targets for hackers and cybercriminals who exploit insecure payment processing systems. These attacks can lead to severe consequences, including financial losses, reputational damage, legal repercussions and a significant loss of customer trust.

This SeerBit blog post highlights the potential risks and consequences of neglecting security in payment systems and emphasises the importance of partnering with a trusted payment solutions provider to effectively mitigate these risks.

Potential Consequences Of Insecure Payment Systems

There are numerous consequences that your business will suffer if you become a victim of fraud due to insecure payment systems. Some of these are discussed below:

  • Financial Losses

The lack of strong security measures in your payment systems can leave your business vulnerable to a wide range of fraud, including unauthorised transactions, identity theft, and credit/debit card fraud. These threats often lead to significant financial losses for businesses. A 2023 report by IBM revealed that the average global cost of a data breach has risen to $4.45 million, covering both direct expenses like fines and legal fees, as well as indirect costs such as customer attrition and lost business opportunities.

In 2023, three Nigerian fintech companies lost more than N5 billion to hacking incidents between Q1 and Q3 of the year, while another lost N800 in just one week, according to media reports. These alarming incidents highlight significant vulnerabilities within the security architecture of payment systems.

The rise in security breaches and fraud cases in recent years, along with businesses being compromised through their connections to insecure platforms, underscores the critical importance of secure payment processing. This highlights the need for businesses to partner with a trusted payment solutions provider.

  • Reputational Damage

Reputational damage from a data breach or fraud often has a longer-lasting impact than the immediate financial losses. Today’s customers are more aware and concerned about the security of their personal and financial information than ever before.

A single breach can severely undermine customer trust, leading to decreased sales and long-term brand damage. Regaining this trust can be extremely challenging, if not impossible, for many businesses. This loss of customers and revenue underscores why secure payment systems are crucial for business survival and growth.

  • Legal Repercussions

Businesses that experience a security breach or fall victim to fraud may face significant legal repercussions, many of which could be avoidable. In cases of payment fraud, affected stakeholders might sue the business, or the business may need to engage in expensive legal proceedings against those responsible.

Additionally, a security breach could indicate non-compliance with industry best practices or current security standards, such as PCI DSS (Payment Card Industry Data Security Standards), potentially resulting in substantial fines and other legal consequences.

How To Secure Your Payment Process And Protect Your Business Against Fraud

The operational disruption that a fraudulent activity or a breach of your security system can cause will lead to a loss of productivity and efficiency, alongside other consequences already discussed in this post. Hence, you should place a premium on securing your payment process and protecting your business against fraud. One of the best ways to achieve this is by relying on a secure payment gateway.

A payment gateway is a technology that captures and transfers payment data from the customer to the acquiring bank. It acts as an intermediary between your business website and the financial institution, ensuring the secure transfer of sensitive payment information. Payment gateways authorise payments for e-transactions, enabling businesses to securely accept credit card payments, digital wallets, and other forms of online payment.

Key Security Features of Payment Gateways

Below are some of the key security features a payment gateway must incorporate to ensure secure transactions:

  1. Encryption and SSL: Encryption converts data into a secure code to prevent unauthorised access. Secure Socket Layer (SSL) certificates ensure that data transferred between the customer and the merchant is encrypted and secure.
  2. Tokenization: Tokenization replaces sensitive payment information with a unique identifier or token. This token is used during transactions, keeping the actual payment data secure and reducing the risk of data breaches.
  3. PCI DSS Compliance: The Payment Card Industry Data Security Standard (PCI DSS) sets security standards for organisations handling credit card information. Compliance with PCI DSS ensures that payment gateways adhere to stringent security measures to protect cardholder data.
  4. Fraud Detection and Prevention Tools: Advanced tools such as CVV verification, address verification, and AI-based fraud detection systems help identify and prevent fraudulent transactions, safeguarding both businesses and customers.
  5. Trustworthiness: Ensure that the payment gateway has a proven track record and industry certifications to back up its claims of security and reliability.

When selecting a payment gateway for your business, it is crucial to prioritise these key features before trusting them to process your transactions.  A secure payment gateway ensures that your payment systems and processing are secure and insulates your business from fraud and hacking attacks.

Payment gateways lacking these essential features should not be considered for your business.

Benefits of Secure Payment Gateways for Businesses

A secure payment gateway such as SeerBit offers numerous benefits for businesses:

  1. Enhanced Customer Trust and Satisfaction: A secure payment gateway builds customer confidence, encouraging repeat purchases and fostering loyalty.
  2. Reduced Fraud and Chargebacks: By minimising fraud-related losses and reducing chargebacks, businesses can protect their revenue and maintain financial stability.
  3. Regulatory Compliance: Secure payment gateways ensure compliance with legal and regulatory standards, helping businesses avoid penalties and legal issues.
  4. Competitive Advantage: Prioritising security can serve as a unique selling point, setting businesses apart from competitors and attracting security-conscious customers.
Conclusion

In today’s digital economy, the impact of a security breach or payment fraud can be devastating for businesses. As the digital landscape evolves, so do the risks associated with it, making it crucial for businesses to choose secure payment systems proactively. Secure payment gateways are vital for maintaining both the success and credibility of any business in the modern digital age. By prioritising robust security measures, businesses can safeguard themselves and their customers, build trust, and ensure seamless transactions.

At SeerBit, we are committed to providing top-tier security to protect your business and customer data, while also delivering a smooth and efficient payment experience.

 Discover how we can enhance your payment processes today!

 

 


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

Broadcasting

Northern Broadcasters Sue Arewa 24, 7 Others over Licensing   

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Board of Trustees of the Northern Broadcast Media Owners Association (NBMOA) has filed a lawsuit against the broadcast company Arewa 24 Limited and seven other entities, alleging they are operating without proper licenses.

Northern Broadcasters Sue Arewa 24, 7 Others over Licensing   

The case, set for hearing before Justice Omotosho at the Federal High Court in the Federal Capital Territory (FCT), lists the National Broadcasting Commission (NBC), the Federal Ministry of Information and National Orientation, the Advertising Regulatory Council of Nigeria (ARCON), the Federal Competition and Consumer Protection Council (FCCPC), MIPAN, MultiChoice, StarTimes, and ADVAN as defendants.

In a statement issued in Abuja, Alhaji (Dr.) Ahmed Tijjani Ramalan, chairman of the NBMOA Board of Trustees, highlighted concerns that the unlicensed operations of the defendants pose a threat to Nigeria’s established legal and competitive media landscape, impacting media owners and audiences nationwide.

Ramalan stated, “Our objective is to ensure a fair, regulated media environment in line with established broadcasting standards, while maintaining a commitment to the rule of law.”

The NBMOA affirmed its commitment to lawful broadcasting standards and noted that it would refrain from further public comments until the legal proceedings are concluded to respect the judicial process.

Stakeholders in Nigeria’s broadcasting industry are closely watching the case, as its outcome could have significant implications for media regulation and licensing across the country


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Africa’s AI Transformation: Unlocking Potential and Driving Progress

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By Matt Brittin, President of Google Europe, the Middle East and Africa

AI has the potential to drive progress and prosperity across the world. But nowhere is this more apparent than on the African continent. The next decade is set to be Africa’s digital decade – with emerging technologies like AI and the Cloud set to significantly accelerate the continent’s development, and over half the population accessing the Internet for the first time. Simply, AI presents an opportunity too significant to ignore for Africa.

Google is proud to be at the forefront of this transformation, but we’re prouder still of those driving this change. Across the region, African entrepreneurs, nonprofits and organisations are using innovation to solve complex challenges.

Earlier this week I visited Jacaranda Health in Nairobi, who are working to reduce Kenya’s high maternal death rate by using AI to ensure expectant and new moms get the care and information they need. Then there was AirQo, tackling the huge public health problem that is pollution by using AI to track and predict pollution – including in Lagos city.

And in the past few days, I’ve been fortunate enough to explore Nigeria with our Nigerian-born Head of Google Africa, Alex Okosi, and our wonderful local team of Nigerian experts. We’ve had inspiring conversations with business leaders already at the forefront of their industries and explored how to leverage the power of AI to scale their businesses. We also engaged with startups like Towntalk, Farmspeak, and BetaLife, who are using AI to solve some of Nigeria’s biggest challenges.

But AI’s opportunity can only be realised when everyone is included. This week, to help unlock the benefits of the digital economy to everyone, our Speech team in partnership with Google researchers in Accra, launched Voice Search, talk-to-type and voice input on Translate for 15 more African languages – enabling 300 million more Africans the freedom to interact with the web and communicate with their friends and family in the way that comes most naturally to many people: their voice. This includes Nigerian native languages Hausa, Yoruba, Igbo and Nigerian Pidgin, and is another great example of AI built with Africans for Africans.

We believe AI has a pivotal role to play in developing Nigeria’s tech ecosystem. For Africa to fulfil its potential as an AI leader, we need to invest in the skills and knowledge base of local talent. That’s why we’ve backed several initiatives to boost AI skills among developers, individuals and businesses in Nigeria and beyond.

Our Google Career Certificates are enabling Nigerians to develop work-readiness in skills like AI, cybersecurity, digital marketing and programming languages like Python and SQL. Meanwhile, skills-based initiatives like our Hustle Academy provide AI-focused training for small and medium-sized businesses in Nigeria, Kenya and South Africa.

And this week, we’ve announced an additional $5.8 million in funding to support foundational AI and cybersecurity training across these countries. That includes $1.5 million for Data Science Nigeria, who will train unemployed and at risk Nigerians in foundational digital and technology – while Raspberry Pi will also work with Data Science Nigeria to roll out AI literacy for Kenyan and Nigerian youth.

To further inspire the next generation, we are launching a program to train 25,000 educators, equipping them with the knowledge and resources to bring AI education to 125,000 students across Nigeria. By fostering an understanding of AI’s potential among young people, we can inspire them toward sustainable future jobs and empower them to shape a better future for themselves and their communities.

This progress is underpinned by infrastructure. In late 2022, our Equiano subsea fibre-optic cable launched in Lagos – providing a new generation of Nigerians with greater connectivity to expand their horizons. Technology alone is not the answer to everything, but it can provide the foundation that enables the next generation of African businesses to thrive. Ultimately, technology is the means by which we can improve lives.

If we measure this progress numerically, AI is a bet worth taking. For every $1 invested in Sub-Saharan Africa’s digital economy, we can generate $2 in economic value by 2030. For some nations, like Nigeria, the growth will be even greater, with an $8 return for every $1 invested.

But beyond the numbers are the stories of the lives we can transform. For every student at the start of their journey, or the budding entrepreneur with a great idea, investment truly matters. We can empower individuals with the knowledge to understand the digital tools at their fingertips. And just as importantly, we can inspire a mindset shift – a renewed belief in the power of education and skills to shape a better future.

We’re proud to have seen this development up close. Our commitment to the digital transformation of the continent began in 2007 with the opening of our first office in Nairobi, Kenya, where we later announced the launch of our Product Development Center in 2022. And in 2018, we opened an AI research centre in Accra, Ghana, where our teams on the ground explore how AI can be used to solve problems in Africa and beyond.

Collaboration is key, and we’ve worked to foster partnerships and develop programmes with institutions and innovators across Africa. By enabling governments and businesses to integrate technologies like AI into the way they operate, we believe we can improve efficiency and bridge divides.

But this is not just a Google story – it’s a true African success story in the making. AI is not something to be imposed on Africa from the top-down, but rather, built from the bottom-up. It’s about collaboration, partnerships, and putting local entrepreneurial talent in the driving seat.

The task now is to ensure that all Africans benefit from these technological breakthroughs – and to use AI responsibly and equitably. Africa is no stranger to leveraging technology for the greater good. African innovators have pioneered technology like mobile money systems – starting with M-Pesa in Kenya – that have influenced financial inclusion and the way the world does business.

So there is nowhere better placed than Africa to ensure the future of AI is in good hands. And if we succeed, it’s not just Africa that will benefit – but the whole world.


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Fire Razes 3 Radio Stations in Abia

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Three radio stations lost their electronic broadcasting equipment worth millions on Saturday night in Aba, Abia state, when they were gutted by fire.

Fire Razes 3 Radio Stations in Abia

The affected radio stations were Enyimba 94.3 FM, Rose 101.9 FM and Legend 98.3 FM which were all located in the same building located o on the PZ axis of Aba-Owerri Road.

But for the intervention of the officials of the Abia State Fire Service, the fire may have spread to other buildings within the vicinity.

No life was lost in the raging inferno.

According to The Nation, a personnel of the Abia State Fire Service, who pleaded anonymity, called on owners of big factories and companies to procure fire extinguishers and hydrants to help assist manage and attack fire during such incident.


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