The future is cashless and corporates need to up their game in security

Research showed that Britain is on its way to become a cashless society in a matter of couple decades only. Despite the convenience in carrying zero cash in your pocket, preparing for this reality is a challenge which needs to be addressed by corporates and merchants from now. New regulations coming into force soon will demand a change of practices in corporations to ensure more security.

A recent research from Gala Casino showed a decrease of almost 20% in the number of cash transactions in the UK throughout the last ten years. Payments UK is predicting that within four years, the quantity of non-cash transactions will outnumber notes and coins payments.

It does not come as a big surprise then, that , by 2043, Britain is expected to be a cashless society, relying completely on card payments and online transactions – and possibly other payment methods yet to come.

The numbers on connected gadgets also point in the same direction. In 2016, there were 6.4 billion connected gadgets worldwide. This number is expected to jump to 24 billion in 2020, according to Business Insider. In the corporate sector, by 2018, 45% of fast-growing companies will have fewer staff than instances of smart machines. And by 2020, 85% of customer interactions will be handled without a human.

A great factor motivating this shift is contactless technology and easier online payment processes. Yet, this move towards no cash payments could be even bigger if the two greatest concerns of users were addressed more efficiently: Fraud (61%) and reliance on technology (45%)

As transactions are being taken onto online and tech platforms exclusively, the risk of frauds and data theft increases. Regulations are coming into force aiming to prevent and reduce damages, yet, keeping up with all the requirements is not an easy task and needs to be done carefully.

Neira Jones is a payment security expert and non-Executive Director of Secure Trading’s security partner Cognosec AB, a Nasdaq listed cybersecurity company based in Sweden. Neira spoke with IG on the effect of new regulations on corporates and what being cashless implies for the security of payments. Watch her interview below:

The regulations regarding payment and data security are numerous and they must be analysed carefully to avoid silos: PCI, PSD2, GDPR, e-Privacy Directive, NIS Directive, to name but a few. They concern different factors within the payment and data security sector but they all share the same goal of building stronger and more prepared platforms in corporates.

At the moment, reports show that companies are not taking security as seriously as they should. According to the CITY AM, a Deloitte report concluded that only five percent of FTSE companies have cyber security advisors on their boards, which evidence the lack of preparation from companies to address and prevent frauds and ultimately, protect clients and third parties.

On top of that, companies have been showing poor security practices regarding the protection of customers’ information. Sixty-five percent of organisations clear their customer data only once a year; have no clearing processes in place at all, or simply don’t know how often their data is cleared.

There are steps that need to be followed by merchants and corporates in order to ensure compliance with the regulations and provide maximum security. Firstly, businesses need to have deep understanding of the regulations in their sector. Secondly, a very important measure to be taken is the appointment of a Data Protection Officer (DPO) within corporations’ teams. The DPO is the person who will take care specifically of data safety procedures. The DPO should establish two programmes: Staff Data Protection, which is tailored specifically to address the fragilities inside the company’s environment; and a Supply Chain Review programme. On top of that, corporations are encouraged to classify their data according to which processing basis applies to each category, for example: a consent.

Neira Jones is chairing the conference ‘Unlocking the Power of Data: The Future of Smarter Payments’ on March 22nd in London. The event is hosted by Payments UK and Tech UK and will bring experts to debate the reality and issues of a data-driven economy. Contact Secure Trading to discuss your payments security.