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Vogue Pay was launched in 2012 as a payment processing platform connecting Africa’s one billion people to the global market. Operating from UK and Nigeria and serving a market of hundreds of thousands of SMEs spread across Africa, Europe, Asia and North Americas, its managing director, Michael Olufemi Simeon in this interview with Modestus Anaesoronye reviews the industry, potentials of the business and cashless policy in Nigeria. Excerpts:
What are some of the value added benefits that VoguePay offers?
VoguePay’s tailored solution is reinventing consumer expectations and shifting the financial industry paradigm, thereby making transactions a lot easier for millions of people across the country and beyond. The robust payment platform is a ready-to-use, “out-of-the-box” payment gateway that small businesses can “switch on” to send and receive payment within minutes, with access to analytics to management of their inventory and book keeping. We are at the frontiers of international trade and provide fund transfer services by collecting payments in local currency and paying out in major internal currencies e.g., GBP, USD, EURO.
Your target market are SMEs, what is peculiar about this market segment
You will notice that the adoption of eCommerce has accelerated online payment and many businesses are springing up to tap to this opportunity. While, it is promising, small businesses cannot afford the integration cost of primary gateways which is currently at $682 (N150, 000) per gateway. With the cost of development added, many SMEs will be set back by $1500 before launching ePayment on their websites. The impact of this imbalance is severe to small businesses in Nigeria and Africa in general.
That is why the focus of VoguePay is on helping SMEs power their online payment infrastructure by offering free online payment integration; the estimated market audience is 20 million. We are enabling international companies to tap into Africa’s vast market by providing the capabilities to collect, convert and repatriate in one single sweep. That was why a new version (VoguePay 2.0) was released in 2014 that complies with the International Financial Reporting Standards (IFRS). This has enabled VoguePay to accept international cards, perform automated periodic transaction reconciliation and offer a new range of world class features that have not presently been offered by any Nigerian payment processor or gateway.
What is your take about the development of the cashless policy?
The cashless society is not only a policy but an enabler policy. I think it is brilliant. In my view, I think the CBN hasn’t gone further enough. Because, if you look at the cost of managing cash in this country, it is quiet high. Consider the percentage of business people who are still carrying cash. You just need to sit down at the petrol station and see a world of cash there. Everyone carries cash around and makes us a bit little backward.
I travel a lot and I go to many places both within our continent and outside our own continent and I haven’t seen people carry cash at the pump stations. Apart from the fact that it opens people to risk in terms of security which we all know the situation, it spreads diseases. If you look at our money, these old monies are supposed to have been burnt.
Don’t you think that this cashless policy moving the way it ought to be?
I totally agree. I share that view. One obvious reason is that government, by nature, have the habit of only dealing or engaging with big companies. Big companies whether big banks, and I don’t know any big bank who can turn swiftly, are not in a hurry. They are very conservative. They are not agile and flexible because they are dependent on legacy systems. Some of our banks depended on programmers in India. Before they get authorization, get approval and it becomes proceedings. As a result, it is like you are trying to turn a massive trailer. That is not the best way to change things.
There is now over one billion companies who only started about 4 years ago. Facebook was designed in 2005. Banks are not in the business of disrupting because whose market are they going to disrupt? Whereas our government is designed to speak with big banks rather than speaking to medium size energy-driven companies to get things done fast and efficiently. Those are the kind of challenges we have. Moving forward, we will keep advising them as you need to speak with people underground and around.
How can financial theft be addressed, in terms of your own system do you experience such?
We have experienced system attacks with very low success rate compared to industry figures. This is as a result of our investment in security with privileges to work with agencies with FBI and CIA-level intelligence. I think the challenge in Nigeria is we compromise too often on standard. Even with all the framework, we have put in place back it up with insurance. But what tends to happen in most cases, in banks, is that someone in the bank has compromised and acts has insider.
We are also collaborating with other industry stakeholders via knowledge sharing. This includes taking steps towards I think the first thing we need to do is work closely with them, to have a reporting system between the processors, all the processors, the security and the legal system. What happens is let say someone who breach bank had bank to compromise today, they don’t get prosecuted because most likely the amount they stole they can compromise other people with that amount they stole. At times, it is the same set of people that just got in between themselves.
How does your payment gateway prevent online frauds?
VoguePay deployed 4 pillars of security framework that includes Anti-Money Laundering, Buyer and Seller Protection Programme, Security of VoguePay platform and collaboration with other industry stakeholders.
Firstly, Anti-Money Laundering: VoguePay performs adequate KYC checks on users to ensure that the platform is not used for such criminal activities. Also, by categorizing various businesses based on risk levels, VoguePay is able to limit permissible transactions on such accounts. Our KYC framework also aligns with the CBN initiatives which is aimed at declining the success rate of e-transaction fraud. For example, the Bank Verification Number (BVN) exercise has helped to harmonise multiple bank accounts held by any single individual under one and the same identifying number. CBN also enabled financial institutions to proactively share data and fraud information among banks and other financial service providers which will enable prompt responses to prevent and limit fraud losses.
Secondly, Buyer and Seller Protection Programme: VoguePay has a comprehensive buyer protection policy that protects the interest of the buyers. We are always on the lookout for dubious merchants who attempt collecting funds from unsuspecting customers for services they do not offer or products they do not have in stock. We also monitor transactions on our database to fish out questionable activities for potential fraud and unauthorized card usage. VoguePay has partnered with the global identity platform VERIDU to bring online payments in Nigeria to a world class security level. We also use security token on VoguePay as a second level authentication to prevent unauthorized access to merchant’s account.
Due to our commitment to protecting our merchants and their customers, we also try to ensure that value has been gotten for the money paid through us by implementing a certain window period for any of the parties who feels dis-satisfied with the payment to complain before we release funds. We do this to avoid charge backs as much as possible.
Thirdly, Security of VoguePay platform: VoguePay platform deploys several second-level authentication protocols in order to prevent unauthorized access to merchant’s account. These security algorithms include geo-location monitoring and behavioral pattern analysis systems, transaction patterns monitoring systems, IP monitoring, SSL Security Encryption, GeoTrust with EMV, audit trail, and data encryption technologies are actively in place to ensure security.
These are complemented with pre-emptive security measures including tokenization of access codes and sensitive user information (usually sent to registered email or as SMS sent to phone number) depending on the parameters selected on the merchant’s account settings. With our behavioral pattern analysis systems, we follow a merchant’s volume and frequency of transactions to know when there is sudden change in their pattern of receiving payment, which may warrant internal investigation by our intelligence team to ensure that no kind of money laundering or fraudulent transactions are done through us. Secure Sockets Layer (SSL) is a standard security technology that provides a secure connection between internet browsers and websites, allowing you to transmit private data online.
VoguePay’s financial framework is designed to meet International Financial Reporting Standard (IFRS) and is now working towards PCI SSD compliance certification which will enable us to securely store card details in our data centers.
Fourthly, Security collaboration and advocacy: VoguePay is helping security agencies deal with online fraud at global scale. For example, our fraud control team have identified a pattern of criminals bypassing the card issuer’s authentication system by spending multiple small value transactions across different geographical locations.
These go without investigation by the cyber-security authorities due to the small transactional values involved. However, collectively this represents high value cyber-fraud, especially for small businesses.
Because of this, there is need for collaboration between payment processors, card issuers and security agencies in terms of reporting and investigating incidents and apprehending perpetrators. That is why VoguePay is championing stronger cross-continent collaboration between payment processors, card issuers and security agencies in reporting and investigating incidents and apprehending perpetrators
For example, a criminal gang wanted to exploit the lack of cross-country coordination when it comes to fighting cyber-crime by using a card issued in the USA to perform transactions on a website that is powered by VoguePay in the UK, via a merchant in China. The majority of victims are the owners of small businesses that don’t have the resources or capabilities of larger companies to absorb such losses. This is where VoguePay plays a crucial role to its users; helping to prevent and deter transactions that could prove to be fraudulent. It is initiatives like this that has contributed to VoguePay boasting increased growth rate of 22.3 percent month on month for the last 10 months.
Modestus Anaesoronye
