Friday, November 22, 2024
Nacha's Payments Innovation Alliance recently released Protecting Payments in the Quantum Era: What You Need to Know. Nacha described the document as a primer on quantum computing, explaining key concepts and how it differs from classical computing. It explores the potential applications of quantum computing in the financial sector, particularly in payments, highlighting the opportunities for innovation and efficiency.
Providing foundational knowledge and guidance, the report calls for action: "As the quantum era approaches, leaders in the payments industry must prepare for the impending changes and challenges. The quantum threat to cryptographic security is real and imminent, potentially disrupting the very foundations of digital transactions. Ensuring this trust calls for immediate action to futureproof systems and ensure the continued protection of financial operations."
Nacha included the following key steps to take right now:
For more information and a copy of this report, see www.nacha.org/news/payments-innovation-alliance-releases-new-report-detailing-potential-impact-quantum-computing
Brent Johnson, chief information security officer at Bluefin, highlighted key challenges and trends in payment security for 2025, particularly around PCI compliance and emerging threats.
He warned that the March 31, 2025, PCI-DSS 4.0 compliance deadline has merchants scrambling, especially regarding new MFA and ecommerce requirements. "The amount of confusion has seen a massive push in the industry for the PCI SSC to provide additional guidance," he wrote.
Johnson said he anticipates a continued rise in digital wallet use and tokenization, reducing merchants' exposure to credit card data. He foresees fraud detection improving through AI tools and increased use of virtual cards and 3D Secure authentication. However, he cautioned that threat actors will target supply chains as merchants handle less sensitive data.
Emerging threats include heightened phishing and malware attacks on mobile devices, reflecting the shift toward digital payments. Johnson noted, "Recent studies show that documents needed to steal a person's identity are valued at around $1,000 on the dark web," underscoring the high stakes for data protection, he added.
Scott Dawson, CEO of DECTA said he anticipates regulatory changes and market shifts under the new U.S. presidential administration, including reduced regulations and the issuance of new banking charters. "With a lack of effective regulation, low-quality players are going to enter the market, which could mean increased competition or a race to the bottom," he said.
Dawson downplayed the long-term impact of a renewed cryptocurrency surge under Trump, likening it to the boom-and-bust cycle of 2021. He emphasized that fintech resilience will depend on partnerships with providers adept at navigating changing regulations. "The U.S. market is so huge it will have repercussions around the world," he added, urging European companies to monitor U.S. developments closely.
Monica Eaton, CEO of Chargebacks911, said she views Trump's win as an opportunity for smarter regulations and tougher fraud prevention. While acknowledging concerns about decreased regulation, she argued it will empower companies like hers to combat fraud more effectively.
"Access to more data will mean that our AI systems can make smarter decisions," she stated predicting rapid advancements in fraud detection. Eaton stressed the economic cost of fraud, noting, "The $243 billion lost to chargebacks each year is significantly more than the $132 billion lost to shoplifting." She affirmed she is optimistic that reduced red tape will allow for aggressive fraud prevention, ultimately bolstering consumer confidence and economic recovery.
Following the UK government's first National Payments Vision, outlining its ambition for a world-leading payments ecosystem, Tony Craddock, director general of The Payments Association, expressed optimism. This was directly after Chancellor Rachel Reeves' Mansion House speech, which introduced the vision. He praised the initiative as a clear, creative, and motivating framework, saying it is "designed to reflect an industry that has stalled in places but is primed for growth."
Craddock noted that the National Payments Vision aims to create "a trusted, world-leading payments ecosystem delivered on next-generation technology." He highlighted key areas of progress, including reforms to Pay.UK, alignment among regulators, and renewed enthusiasm for Open Banking and CBDCs.
He also emphasized the critical role of enhanced collaboration between government, regulators and industry because it "is critical to delivering the government's growth mission."
Craddock also acknowledged the government's leadership and urged the industry to seize this opportunity for growth and innovation. He called on the Payments Vision Delivery Committee and Vision Engagement Group to fulfill their potential and drive the ecosystem forward.
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