Academic literature on the topic 'Security of payment'
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Journal articles on the topic "Security of payment"
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Hassan, Md Arif, Zarina Shukur, Mohammad Kamrul Hasan, and Ahmed Salih Al-Khaleefa. "A Review on Electronic Payments Security." Symmetry 12, no. 8 (August 12, 2020): 1344. http://dx.doi.org/10.3390/sym12081344.
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Modern technology is turning into an essential element in the financial trade. We focus the emphasis of this review on the research on the E-wallet and online payment, which is an element of an electric payment system, to get the pattern of using this service. This research presents a review of 131 research articles published on electronic payment between 2010 and 2020 that uses a qualitative method of answering the research questions (RQ): RQ1: “What are the major security issues regarding using electronic payments”? and RQ2: “What security properties need to comply for secure electronic payments?” With the systematic literature review approach, the results show that interest in E-wallet and online payment has grown significantly during this period, and it was found that for the increasing uses of electronic payments, researchers are more focused on security issues. The results show that, to conquer the key gaps, electronic payment must have some protection properties, namely, availability, authorization, integrity, non-repudiation, authentication, and confidentiality. Nowadays, security problems in electronic payment are usually more demanding than the present security problems on the web. These findings can enable electric transaction providers to strengthen their security methods by boosting their security gaps, as required for relevant services.
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Vishwakarma, Pinki Prakash, Amiya Kumar Tripathy, and Srikanth Vemuru. "The Fact-Finding Security Examination in NFC-enabled Mobile Payment System." International Journal of Electrical and Computer Engineering (IJECE) 8, no. 3 (June 1, 2018): 1774. http://dx.doi.org/10.11591/ijece.v8i3.pp1774-1780.
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Contactless payments devised for NFC technology are gaining popularity. Howbeit, with NFC technology permeating concerns about arising security threats and risks to lessen mobile payments is vital. The security analysis of NFC-enabled mobile payment system is precariously imperative due to its widespread ratification. In mobile payments security is a prevalent concern by virtue of the financial value at stave. This paper assays the security of NFC based mobile payment system. It discusses the security requirements, threats and attacks that could occur in mobile payment system and the countermeasures to be taken to secure pursuance suitability.
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Kanzafarova, I. S., and M. S. Fedorko. "SECURITY (GUARANTEE) PAYMENT AS AN INNOMINATED ENFORCEMENT OF OBLIGATIONS." Constitutional State, no. 42 (July 7, 2021): 154–63. http://dx.doi.org/10.18524/2411-2054.2021.42.232419.
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The article is devoted to clarifying the features of a security (guarantee) payment as an innominated method of securing the enforcement of an obligation. As a result of the study, there are provisions that can serve as a basis for constructing a sub-institution of a security (guarantee) payment in the obligation law of Ukraine. The conclusion is justified that a security (guarantee) payment is possible only when the material objects of the main and accounting obligations are homogeneous. Homogeneity in security payments is that the subject matter and mode of performance of the principal obligation can be replaced by the same performance, but at the expense of reserved funds. A monetary security payment cannot provide non-monetary obligations in an obligation, since their fulfillment cannot be replaced by a monetary provision. It is proved that the security (guarantee) payment must have separate characteristics of the deposit, pledge, and predetermined losses. A distinctive feature of a security (guarantee) payment, in comparison with other methods of securing the performance of the obligation, is the weakened emphasis, which manifests itself at the stage of the occurrence of the obligation, allows to ensure obligations arising in the future. The regulatory fixation of a security payment in the Civil Code of Ukraine, of course, will be a logical result of its application in practice as an innominated method of ensuring the fulfillment of an obligation. The conclusion is justified that a security (guarantee) payment can perform a punitive function only indirectly: through the application of civil liability measures. In other words, a security payment is only a financial source of satisfaction for claims for forfeiture or damages, but unlike the mentioned measures of liability, a security payment does not have a punitive mechanism in its structure. A security payment is characterized by the existence of a compensation function that aims to restore the property sphere of the creditor, and not acting as a means of punishing the debtor. Attention is drawn to the need to introduce a certain mechanism for allocating funds from the estate of the person to whom they are transferred as a security payment. This mechanism will balance the interests of participants in civil traffic, leveling the risk of their non-return for the person who transferred money as a security payment.
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Polovenko, Liudmyla, Svitlana Merinova, and Kateryna Kopniak. "The development of electronic payment systems in Ukraine and their security." VUZF Review 6, no. 2 (June 29, 2021): 146–52. http://dx.doi.org/10.38188/2534-9228.21.2.17.
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The paper is devoted to the study of innovations in the market of modern payment systems. The pandemic and quarantine restrictions have accelerated the expansion of the payment infrastructure in Ukraine, which in turn raises the issue of security of electronic payment systems. Ukrainians are more actively switching to electronic payments. At the same time, the trend of growing popularity of contactless payment instruments and settlements with them continues. A comparative analysis of the security of payment systems using electronic technologies in the implementation of money transfer services in Ukraine has been performed. The components of the payment system, information security measures in the electronic payment system have been also considered. The schema of electronic payments and the block diagram of the information protection subsystem of electronic payment system have been constructed. The criteria for assessing the security of the electronic payment system have been determined. A total of fifteen safety criteria have been identified, they are divided into six groups according to the degree of safety. Six electronic system payments were used for the study and the research results have been presented in this paper. The tendencies of development of electronic payment systems in modern conditions and ways of improvement of their activity taking into account the newest information technologies have been outlined.
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Kovács, Levente, and Sandor David. "Fraud risk in electronic payment transactions." Journal of Money Laundering Control 19, no. 2 (May 3, 2016): 148–57. http://dx.doi.org/10.1108/jmlc-09-2015-0039.
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Purpose The purpose of this paper is the timely review of regulations on the security of electronic payments, payment innovations and their vulnerabilities and discussing the recommendations elaborated by the European Forum on the Security of Retail Payments. Design/methodology/approach First, the article presents a serious fraud case which happened in the Hungarian banking system. This case demonstrates all risks associated with the security of payment channels being used. Next, the article examines those international SecuRe Pay Forum recommendations which target the elimination of such fraud risks. Finally, the article compares current domestic regulations with these recommendations. Findings The fraud incidents and the speed of penetration of new fraud techniques and methods caught the attention of payment service providers, customers, supervisors and overseers. The result of their cooperation is the European Forum on the Security of Retail Payments. The forum elaborated three sets of recommendations on security of Internet payments, payment account access services and mobile payments, which are missing elements of the present Hungarian and pan-European regulations. Both domestic and international regulators should build on the revised Payment Services Directive and the recommendations in question, to avoid fraud incidents like the one this article initially portrayed. Originality/value The article presents a specific, true case which took place in Hungary in 2014.
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Bhutta, Muhammad Nasir Mumtaz, Surbhi Bhattia, Mohammed Ali Alojail, Kashif Nisar, Yue Cao, Shehzad Ashraf Chaudhry, and Zhili Sun. "Towards Secure IoT-Based Payments by Extension of Payment Card Industry Data Security Standard (PCI DSS)." Wireless Communications and Mobile Computing 2022 (January 24, 2022): 1–10. http://dx.doi.org/10.1155/2022/9942270.
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IoT emergence has given rise to a new digital experience of payment transactions where physical objects like refrigerators, cars, and wearables will make payments. These physical objects will be storing the cardholder credentials and will directly make payments with the vendors over insecure public networks. For such payment transactions, government regulations and standards organizations require to implement PCI DSS for adapting similar set of security measures at the global level. The current version of PCI DSS is not suitable for IoT-based payment systems due to characteristics of IoT such as resource-constrained nature of devices and updating software/firmware of so many physical devices. Also, there arises an emergent need of implementing PCI DSS requirements and assessments for security of all stakeholders that store or process the user credentials in a payment. This paper is an initial effort to bring the researcher’s attention to make upcoming versions of PCI DSS suitable for IoT and thus securing the new ways of IoT-based payment systems. The paper has reviewed the traditional payment process along with considerations for IoT-based payment systems to make recommendations to modify the PCI DSS in a suitable way for IoT.
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Tsai, Shuo-Chang, Chih-Hsien Chen, and Keng-Chang Shih. "Exploring Transaction Security on Consumers’ Willingness to Use Mobile Payment by Using the Technology Acceptance Model." Applied System Innovation 5, no. 6 (November 11, 2022): 113. http://dx.doi.org/10.3390/asi5060113.
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In recent years, with the increase in Fintech innovation, mobile payment has played an important role. This research is to investigate factors affecting consumers’ willingness to use mobile payment. The study found that perceived ease of use and perceived usefulness have a significant positive impact on consumer’s adoption of mobile payments. In addition, from empirical research on the mediating effect of transaction security on attitudes toward using it and behavioral intention to use, the study found that transaction security has a significant mediating effect, and empirical data shows that transaction security can strengthen consumers’ behavior towards using mobile payment intention, this also explained why the penetration rate of mobile payments in developed countries is lower than in developing countries. In summary, to encourage consumers to willingly use the new mobile payment tool, in addition to making the tool easy to use and useful, it is crucial that transaction security can assure consumers’ willingness to use mobile payment.
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Rabiah, Arbi Siti, Mochammad Fahlevi, Nendi Juhandi, and Pawit Winarto. "HARUSKAH E-PAYMENT TRUST DITERAPKAN E-COMMERCE SEBAGAI FAKTOR KEPUASAN KONSUMEN?" E-Jurnal Manajemen Universitas Udayana 9, no. 7 (July 3, 2020): 2724. http://dx.doi.org/10.24843/ejmunud.2020.v09.i07.p13.
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Consumer trust related to payment is an important topic in several studies of online shopping. Consumers are very concerned about security in transactions including when making payments in cashless. This study uses a non-parametric test using SmartPLS with 243 respondents used as samples. The results of this study provide information that E-payment trust is an important factor for consumer satisfaction in E-commerce in Indonesia. Trust related to payments is closely related to information security and data privacy security of consumers when making transactions on E-commerce.
Keywords: Trust; E-Payment; Kepuasan Konsumen; E-Commerce.
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Huddin, Muhammad Nurhaula Huddin, and Khairul Ikhsan. "MOBILE PAYMENT SATISFACTION POST PANDEMIC COVID-19 IN INDONESIA." Jurnal Riset Akuntansi Dan Bisnis Airlangga 7, no. 2 (November 27, 2022): 1326–79. http://dx.doi.org/10.20473/jraba.v7i2.39834.
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This study aims to examine the effect of technology security, ease of use, usability, and continuousimprovement on the satisfaction of mobile payment users. This study uses a purposive sampling techniquewith certain criteria. The population of this study are respondents who have used m-payment services duringthe Covid-19 pandemic from 2020 to 2021 in Indonesia. Questionnaires were distributed through an onlinesurvey method with a total sample of 317 respondents. Hypothesis testing was carried out using StructuralEquation Modeling (SEM) AMOS 23. The results showed that technology security had a positive effect onmobile payment satisfaction, ease of use had a positive effect on mobile payment satisfaction, usability had apositive effect on mobile payment satisfaction, continuous improvement had a positive effect on satisfactionmobile payments, and satisfaction have a positive effect on the trustworthiness of mobile payments. Thisresearch provides information to payment service providers to continuously improve improvements in allaspects of services, especially security and ease of use, as well as benefits for consumers in conductingfinancial transactions.
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Xu, Ruohan. "Optimized Secure Payment Solution Using QR Code Scanning based on Operation-payment Dual Devices." BCP Business & Management 17 (February 23, 2022): 118–23. http://dx.doi.org/10.54691/bcpbm.v17i.383.
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With the development of the internet and mobile payment technology, the mobile payment transaction volume in China is rising year by year. Likewise, an increasing number of people are using mobile payments for their convenience and stability. In recent years, however, security incidents involving these mobile payments have also occurred more frequently. Some lawbreakers have been known to add illegal information to QR codes so that the mobile phones of unwitting customers are infected with viruses when they scan the codes to make payments. These viruses result in losses of personal property. In view of this, we propose an optimized secure payment solution for QR code scanning based on Operating-payment dual devices. This sets a separation of the payment process by utilizing both an operating device and a payment device, so as to minimize losses when customers scan malware-infected QR codes. Through theoretical analysis, our proposed solution can effectively improve the security of QR code payments, and meet the requirements for secure payment in daily life.
Dissertations / Theses on the topic "Security of payment"
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Huang, Enyang. "Automated security analysis of payment protocols." Thesis, Massachusetts Institute of Technology, 2012. http://hdl.handle.net/1721.1/78140.
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Thesis (Ph. D. in the Field of Computer Engineering)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2012.Cataloged from PDF version of thesis.
Includes bibliographical references (p. 173-182).
Formal analyses have been used for payment protocol design and verification but, despite developments in semantics and expressiveness, previous literature has placed little emphasis on the automation aspects of the proof systems. This research develops an automated analysis framework for payment protocols called PTGPA. PTGPA combines the techniques of formal analysis as well as the decidability afforded by theory generation, a general-purpose framework for automated reasoning. A comprehensive and self-contained proof system called TGPay is first developed. TGPay introduces novel developments and refinements in the formal language and inference rules that conform to the prerequisites of theory generation. These target desired properties in payment systems such as confidentiality, integrity, authentication, freshness, acknowledgement and non-repudiation. Common security primitives such as encryption, decryption, digital signatures, message digests, message authentication codes and X.509 certificates are modeled. Using TGPay, PTGPA performs analyses of payment protocols under two scenarios in full automation. An Alpha-Scenario is one in which a candidate protocol runs in a perfect environment without attacks from any intruders. The candidate protocol is correct if and only if all pre-conditions and post-conditions are met. PTGPA models actions and knowledge sets of intruders in a second, modified protocol that represents an attack scenario. This second protocol, called a Beta-Scenario, is obtained mechanically from the original candidate protocol, by applying a set of elementary capabilities from a Dolev-Yao intruder model. This thesis includes a number of case studies to demonstrate the feasibility and benefits of the proposed framework. Automated analyses of real-world bank card payment protocols as well as newly proposed contactless mobile payment protocols are presented. Security flaws are identified in some of the protocols; their causes and implications are addressed.
by Enyang Huang.
Ph.D.in the Field of Computer Engineering
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Baqer, Khaled. "Resilient payment systems." Thesis, University of Cambridge, 2018. https://www.repository.cam.ac.uk/handle/1810/285001.
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There have been decades of attempts to evolve or revolutionise the traditional financial system, but not all such efforts have been transformative or even successful. From Chaum's proposals in the 1980s for private payment systems to micropayments, previous attempts failed to take off for a variety of reasons, including non-existing markets, or issues pertaining to usability, scalability and performance, resilience against failure, and complexity of protocols. Towards creating more resilient payment systems, we investigated issues related to security engineering in general, and payment systems in particular. We identified that network coverage, central points of failure, and attacks may cripple system performance. The premise of our research is that offline capabilities are required to produce resilience in critical systems. We focus on issues related to network problems and attacks, system resilience, and scalability by introducing the ability to process payments offline without relying on the availability of network coverage; a lack of network coverage renders some payment services unusable for their customers. Decentralising payment verification, and outsourcing some operations to users, alleviates the burden of contacting centralised systems to process every transaction. Our secondary goal is to minimise the cost of providing payment systems, so providers can cut transaction fees. Moreover, by decentralising payment verification that can be performed offline, we increase system resilience, and seamlessly maintain offline operations until a system is back online. We also use tamper-resistant hardware to tackle usability issues, by minimising cognitive overhead and helping users to correctly handle critical data, minimising the risks of data theft and tampering. We apply our research towards extending financial inclusion efforts, since the issues discussed above must be solved to extend mobile payments to the poorest demographics. More research is needed to integrate online payments, offline payments, and delay-tolerant networking. This research extends and enhances not only payment systems, but other electronically-enabled services from pay-as-you-go solar panels to agricultural subsidies and payments from aid donors. We hope that this thesis is helpful for researchers, protocol designers, and policy makers interested in creating resilient payment systems by assisting them in financial inclusion efforts.
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Marais, Terrence K. "Electronic payment and security on the Internet." Thesis, Stellenbosch : Stellenbosch University, 2002. http://hdl.handle.net/10019.1/52819.
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Thesis (MBA)--Stellenbosch University, 2002.ENGLISH ABSTRACT: The greatest potential worry that an on-line shopper has is what happens to his/her credit card details from the moment "submit" is pressed on the computer. Is it possible for someone on the Internet to intercept the message and use credit card details maliciously? Also, there is a lot of talk about personal details being encrypted, but how sure is one that this was indeed the case once "submit" has been pressed? Is there a way in which one can be sure that a transaction will occur only once? Many of the security issues are new and many experts are only learning how to deal with these now. This thesis offers suggestions and strategies a user can follow to minimize misuse and abuse of payment details. Electronic payment is the backbone of e-commerce, and the biggest threat towards widespread acceptance and usage of e-commerce is security. Many innovative solutions have been developed by vendors to address security issues. For example, the Secure Electronic Transfer (SET) protocol was developed to ensure that credit card transactions could be conducted safely and securely on the Internet. Secure Socket Layer (SSL) ensures that all communications and transactions are conducted in a tightly secure environment. This is critical for online or mobile banking and other financial activities. Others developments include payment systems that ensure that credit card details are never exposed to a merchant (e.g. SET), while some ensure that credit card numbers never enter the Internet. The five corner stones of security are confidentiality, privacy, authentication, integrity and non-repudiation. Authentication, non-repudiation and integrity can be resolved with digital certificates, digital timestamps and digital signatures. Message confidentiality, on the other hand, is ensured through the use of strong encryption. Encryption systems mutilate data or a message to such an extent that it is totally useless to someone who does not have the appropriate algorithm and key to decode it. The most widely used encryption schemes are the secret key and public key encryption systems. The public key cryptosystem generates two keys, called a public and private key. The public key can be made generally known, but the private key must be kept secret. A unique property of the scheme is that once data is encrypted with one key, only the corresponding other key of the pair can decrypt it. This makes it possible to address issues of authentication, integrity and non-repudiation. Traditional payment instruments such as cash, cheques, debit and credit card transactions are being replaced by their electronic equivalents. The driving forces behind these are transactional security, efficiency and speed. Novel payment solutions and strategies have been devised to meet the challenges of this new economy. For example, smart cards can act as an electronic purse that can hold electronic money. Other information, such as personal details, medical records, driver's licence, etc. can also be stored on the card. Whilst many security experts are in agreement that security is not a barrier anymore for wider usage of the Internet for financial transactions, many consumers are still apprehensive about how secure and safe it really is. This work aims to diminish those fears and show that the Internet is safe for business.
AFRIKAANSE OPSOMMING: Een van die grootste bekommernisse wat 'n kliënt met aankope op die Internet kan ondervind, is die onsekerheid wat presies gebeur nadat betalings aangegaan is en "Submit" is gedruk. Is dit moontlik dat iemand die boodskap kan onderskep en betaling besonderhede vir eie gebruik kan herwin? Daar is ook baie publisiteit oor kodifisering, maar hoe kan die klient verseker wees dat betalings besonderhede wel gekodifiseer is wanneer "Submit" gedruk was? Is daar 'n manier waarmee 'n mens verseker kan wees dat betaling slegs eenkeer gaan geskied? Baie van die sekuriteits lokvalle is nuut en sekuritiets kenners is tans besig om te leer hoe om die probleme te hanteer. Die werkstuk offer wenke en strategieë vir die verbruiker om die misbruik van betaling besondehede op die Internet te minimiseer. Elektronies betalings meganisme is die ruggraat van elektroniese besigheid, en die grootste struikelblok tot die grootskaalse gebruik daarvan is sekuriteit. Daar is baie innoverende oplossings om die probleme hok te slaan. By voorbeeld, die Secure Electronic Transfer (SET) protokol was ontwikkel om te verseker dat betalings met kredietkaart met hoë sekuriteit en veiligheid aangegaan kan word. Secure Socket Layers (SSL), verseker dat alle kommunikasies en transaksies in 'n sekuur en veilige omgewing plaasvind. Dit is veral krities wanneer die verbruiker gebruik maak van die Internet of vanaf selfone om transaksies aan te gaan met 'n bank. Ander ontwikkelinge sluit in betalings metodes wat verseker dat die handelaar nooit die kredietkaart besonderhede sien nie (bv. SET). Ander verseker weer dat die betalings besonderhede nooit oor die Internet hoef gestuur te word nie. Die vyf hoekstene van sekuriteit is konfidensialiteit, privaatheid, outentisiteit, integriteit en non-repudiasie. Outentisiteit, integriteit en non-repudiasie word opgelos deur die gebruik maak van digitale sertifikate, digitale tydstempels en digitale handtekeninge. Konfidensialiteit kan verseker word deur die boodskap te kodifiseer. Kodifikasie behels die verandering van data of boodskappe op so 'n wyse dat dit van geen betekenis is vir 'n persoon wat nie die korrekte algoritme en sleutel het om dit te dekodifiseer nie. Die geheime en publieke kodifiserings stelsels word die meeste gebruik om data te kodifiseer. Die publieke kodifiserings stelsel genereer twee sleutels, naamlik 'n privaat en publieke sleutel. Die publieke sleutel kan alom bekend gemaak word, maar die private sleutel moet slegs bekend wees aan sy gebruiker. 'n Unieke eienskap van die stelsel is dat indien 'n boodskap gekodifiseer is met een sleutel, slegs die ander sleutel van die paar dit sal kan dekodifiseer. Dit maak dit moontlik om outentisiteit, integriteit en non-repudiasie toe te pas. Die tradisionele metodes van betaling soos kontant, tjek en debiet of kredietkaart, gaan mettertyd vervang word deur hul elektroniese eweknie. Die dryfkrag agter die verskynsel is die hoë sekuriteit, doeltreffendheid en spoed waarmee transaksies op die manier gehanteer kan word. Vindingryke betaling metodes is ontdek om die besondere uitdagings van die nuwe ekonomie aan te speek. Byvoorbeeld, knap kaarte kan gebruik word as 'n elektroniese beursie wat elektroniese geld bêre. Ander persoonlike inligting, mediese records, bestuurlisensies, ens. kan ook op die kaart geberg word. Terwyl baie sekuriteits kenners glo dat sekuriteit nie meer 'n stuikelblok is om die Internet vir besigheids transaksies te gebruik nie, bly baie van die verbruikers skepties. Die werkstuk se doel is om daardie onsekerhede uit die weg te ruim, deur te verduidelik hoe sekuriteit toe gepas word, en om te bewys dat die Internet interdaad veilig is as a medium vir besigheids transaksies.
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Taylor-King, Darlean. "Parental payment abuse within the Supplemental Security Income program." ScholarWorks, 2008. https://scholarworks.waldenu.edu/dissertations/642.
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Management of Social Security Administration (SSA) has been challenged by the phenomena of overpayments with its Supplemental Security Income (SSI) program. Oversight authorities of SSA had expressed concerns about the overpayment abuse caused by parents as representative payees for disabled minor children. It was important to address this problem because the amount of overpayments prior to 1998 had caused integrity issues for management of SSA and increased federal debt from SSI claimants. The purpose of this study was to examine how management of SSA and the SSI program had responded to the concerns of the oversight authorities. Theoretical foundations for this study were based on systems concepts and theories as basic rationale for the examination of feedback from systems operation and for organizational learning about the phenomena of overpayments. This study employed a case study methodology using an approach that examined the SSI program and its operational procedures. The questions for this study involved inquiries into processes and procedures that were developed for improving payment accuracy of SSI claims. Data analysis was performed by comparing the change in overpayment amounts to the implementation of different technological and operational procedures for the SSI program over time using time series analysis. The results of this study suggested that technology that allows sharing communications between federal and state governmental organizations improved overpayment detection and collection for the SSI program. This sharing provided positive social change that could have implications for improved operational efficiency in many other social service programs in the United States.
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Garner, Philip David. "Security and fraud analysis for new models in mobile payment." Thesis, Lancaster University, 2006. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.441830.
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Randa, Jakub. "Systém pro integraci platebních terminálů." Master's thesis, Vysoké učení technické v Brně. Fakulta informačních technologií, 2014. http://www.nusl.cz/ntk/nusl-412896.
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This master's thesis describes the process of integration of electronic payment terminals into another technological solutions and eventually enabling the opportunity to make electronic payments using these solutions. It analyses the current situation on the field of electronic payments and the possibilities of own solution for these payments. It discusses the security aspects of payment operations and terminals and it also describes current legal situation involving the electronic payments in Czech Republic. It describes the process of implementation of the application for payment terminal integration and analyses the results of testing.
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Sifatullah, Bhuiyan Mohammad. "Securing Mobile Payment Protocol based on EMV Standard." Thesis, KTH, Skolan för informations- och kommunikationsteknik (ICT), 2012. http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-121512.
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This is an era of communication technology. This era has faced a lot of innovation in technology sector. Mobile phones were once used for calling or text messaging only, now slowly becoming competitor of computers. The rapid development of hardware, software and operating system of smartphones made it possible to do multiple tasks through the phones. Nowadays, smart phones have powerful operating systems which provide wide range of applications. Smart phones can be interfaced with external hardware also. The payment industry is about to see a drastic change because of these features. People can now pay through their smartphones; they can use payment cards to pay through it etc. But financial transaction is a very sensitive service and security is very crucial here. For financial services, the major security services such as confidentiality, integrity, authenticity, authorization and non-repudiation must be ensured. There are two major types of payment cards, magnetic-stripe based cards and chip based cards. Chip based card provides better security. Magnetic stripe based cards being static, is easy to counterfeit. But the fact that these magnetic stripe cards are still used in many countries, it is necessary to provide a security solution in order to protect customers from treachery. In this thesis, it has been investigated how to secure the mobile payment based on EMV standard. EMV is a chip based payment card. It has strong security features which made skimming or tampering it very hard. But, Magstripe based payments still remained insecure. This thesis paper aims to secure the transaction when paid with magnetic stripe based cards. Several measures have been taken to ensure that major security services are met. In addition, a prototype was developed and tested to demonstrate the practicality of the designed solution. The research results of this paper show that by transacting through the secured mobile payment protocol, customers can avail payment service more securely than traditional magnetic striped card based payments.
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Chen, Bangdao. "Using human interactive security protocols to secure payments." Thesis, University of Oxford, 2012. http://ora.ox.ac.uk/objects/uuid:f73a0165-410f-4a69-a56c-b6f004253ba3.
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We investigate using Human Interactive Security Protocols (HISPs) to secure payments. We start our research by conducting extensive investigations into the payment industry. After interacting with different payment companies and banks, we present two case studies: online payment and mobile payment. We show how to adapt HISPs for payments by establishing the reverse authentication method. In order to properly and thoroughly evaluate different payment examples, we establish two attack models which cover the most commonly seen attacks against payments. We then present our own payment solutions which aim at solving the most urgent security threats revealed in our case studies. Demonstration implementations are also made to show our advantages. In the end we show how to extend the use of HISPs into other domains.
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Mays, Shelley M. "Income Payment Structure and its Influence on Food Security and Fruit Consumption." Digital Archive @ GSU, 2013. http://digitalarchive.gsu.edu/iph_theses/294.
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Background: Despite the growing evidence of the positive effects of fruit consumption on health, many individuals do not consume the recommended dietary guideline amounts. It has been suggested that socioeconomic status and income have an influence on food choices and consumption. The aim of this study is not only to examine whether payment structure has an association with food choices but also to assess fruit consumption independent of vegetables in the US.
Methods: The 2011 Behavioral Risk Factor Surveillance System was utilized and the study design led to a sample size that was n= 19,122 respondents. Variables that were selected for associations with sufficient fruit consumption included demographic data, employment status, payment structure, education, and home ownership status. A p-value of <0.05 and 95% confidence intervals were used to determine statistical significance of the analyses performed.
Results: Factors that were associated with greater odds of sufficient fruit consumption included being African-American, education- all levels of high school graduate and higher, all income categories above $15,000 annually, those employed, and those who rent a home (p-value<0.01). Multivariate logistic regression analysis indicated that respondents' education defined as having college education was associated with increased odds of sufficient fruit consumption (OR = 7.09: CI =1.86-27.09] (p-value<0.01).
Conclusions: Assessing fruit consumption alone did not provide greater insight on sufficiency with the exception of race's (specifically African American) influence. Payment structure was found not associated with increased fruit consumption. Promotion of education on the relevance of fruit consumption to overall health is critical and necessary in the United States.
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Grundström, Niklas. "A Security Analysis of a Credit Card Payment System for Bitcoin Transactions." Thesis, Linköpings universitet, Programvara och system, 2018. http://urn.kb.se/resolve?urn=urn:nbn:se:liu:diva-148230.
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Cryptocurrencies has become a very hot topic recently, with Bitcoin being the most popular. The increase in interest has led to an incentive to create payment systems for the currency that makes it easier to use for day-to-day shopping. A lot of companies are inves- tigating possible solutions for credit cards that are used for cryptocurrencies. This thesis aims to present and perform a security analysis on an already created concept of a credit card payment system for Bitcoin. The security analysis is done in a systematical approach where the modules were analyzed with predetermined restrictions and assumptions. The restricitons and assumptions are then removed one-by-one to find potential threats in the system. The outcome of the analysis is then evaluated in an attempt to find possible im- plementation methods that would mitigate or prevent the discovered threats. The possible implementations are also evaluated in terms of how they would affect the system.
Books on the topic "Security of payment"
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missing], [name. Payment technologies for E-commerce. Berlin: Springer, 2003.
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E, Maggs Gregory, ed. Questions & answers: Payment systems. New Providence, NJ: LexisNexis, 2013.
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Virtue, Timothy M., ed. Payment Card Industry Data Security Standard Handbook. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2012. http://dx.doi.org/10.1002/9781119197218.
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Payment card industry data security standard handbook. Hoboken, N.J: John Wiley & Sons, 2009.
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Virtue, Timothy M. Payment Card Industry Data Security Standard Handbook. New York: John Wiley & Sons, Ltd., 2008.
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Montague, David. Essentials of Online Payment Security and Fraud Prevention. Hoboken, NJ, USA: John Wiley & Sons, Inc., 2010. http://dx.doi.org/10.1002/9781118386750.
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Montague, David A. Essentials of online payment security and fraud prevention. New York: Wiley, 2010.
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Singapore, ed. Security of payments and construction adjudication: The regime under the Building and Construction Industry Security of Payment Act 2004. Singapore: LexisNexis, 2005.
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Orszag, Peter R. Should a lump-sum payment replace social security's delayed retirement credit? Boston, MA: Center for Retirement Research at Boston College, 2001.
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Security of payments and construction adjudication. Singapore: LexisNexis, 2013.
Find full textBook chapters on the topic "Security of payment"
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Jourenko, Maxim, Mario Larangeira, and Keisuke Tanaka. "Payment Trees: Low Collateral Payments for Payment Channel Networks." In Financial Cryptography and Data Security, 189–208. Berlin, Heidelberg: Springer Berlin Heidelberg, 2021. http://dx.doi.org/10.1007/978-3-662-64331-0_10.
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Lerner, Thomas. "Mobile Technology and Security." In Mobile Payment, 39–60. Wiesbaden: Springer Fachmedien Wiesbaden, 2013. http://dx.doi.org/10.1007/978-3-658-03251-7_4.
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Téllez, Jesús, and Sherali Zeadally. "Mobile Device Security." In Mobile Payment Systems, 19–33. Cham: Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-23033-7_2.
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Rambure, Dominique, and Alec Nacamuli. "Risks in Payment Systems, Oversight and Security." In Payment Systems, 52–68. London: Palgrave Macmillan UK, 2008. http://dx.doi.org/10.1057/9780230227217_4.
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Bleumer, Gerrit. "Electronic Payment." In Encyclopedia of Cryptography and Security, 387–89. Boston, MA: Springer US, 2011. http://dx.doi.org/10.1007/978-1-4419-5906-5_198.
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Soete, Marijke De. "Payment Card." In Encyclopedia of Cryptography and Security, 918–19. Boston, MA: Springer US, 2011. http://dx.doi.org/10.1007/978-1-4419-5906-5_296.
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Téllez, Jesús, and Sherali Zeadally. "Security in Mobile Payment Systems." In Mobile Payment Systems, 93–106. Cham: Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-23033-7_4.
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Zhang, Fangguo, and Yumin Wang. "Security Fundamentals." In Payment Technologies for E-Commerce, 7–38. Berlin, Heidelberg: Springer Berlin Heidelberg, 2003. http://dx.doi.org/10.1007/978-3-662-05322-5_2.
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Mehrnezhad, Maryam, Mohammed Aamir Ali, Feng Hao, and Aad van Moorsel. "NFC Payment Spy: A Privacy Attack on Contactless Payments." In Security Standardisation Research, 92–111. Cham: Springer International Publishing, 2016. http://dx.doi.org/10.1007/978-3-319-49100-4_4.
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Kılınç, Handan, and Serge Vaudenay. "Secure Contactless Payment." In Information Security and Privacy, 579–97. Cham: Springer International Publishing, 2018. http://dx.doi.org/10.1007/978-3-319-93638-3_33.
Full textConference papers on the topic "Security of payment"
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Churaev, I. L., K. B. Dakhkilgova, and Kh G. Chaplaev. "NFC payment security." In I INTERNATIONAL CONFERENCE ASE-I - 2021: APPLIED SCIENCE AND ENGINEERING: ASE-I - 2021. AIP Publishing, 2021. http://dx.doi.org/10.1063/5.0075551.
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Martinez-Pelaez, Rafael, Francisco Rico-Novella, and Cristina Satizabal. "Mobile Payment Protocol for Micropayments: Withdrawal and Payment Anonymous." In 2008 New Technologies, Mobility and Security (NTMS). IEEE, 2008. http://dx.doi.org/10.1109/ntms.2008.ecp.61.
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Vorontsov, S. G. "Security payment: myths and reality." In ТЕНДЕНЦИИ РАЗВИТИЯ НАУКИ И ОБРАЗОВАНИЯ. НИЦ «Л-Журнал», 2018. http://dx.doi.org/10.18411/lj-11-2018-60.
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"E-PAYMENT SECURITY - Recommendations about the use of a PKI for e-payment security." In 1st International Conference on E-business and Telecommunication Networks. SciTePress - Science and and Technology Publications, 2004. http://dx.doi.org/10.5220/0001396803170323.
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Wang, Yong, Christen Hahn, and Kruttika Sutrave. "Mobile payment security, threats, and challenges." In 2016 Second International Conference on Mobile and Secure Services (MobiSecServ). IEEE, 2016. http://dx.doi.org/10.1109/mobisecserv.2016.7440226.
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Rahaman, Sazzadur, Gang Wang, and Danfeng (Daphne) Yao. "Security Certification in Payment Card Industry." In CCS '19: 2019 ACM SIGSAC Conference on Computer and Communications Security. New York, NY, USA: ACM, 2019. http://dx.doi.org/10.1145/3319535.3363195.
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Sahut, Jean-Michel. "Security and Adoption of Internet Payment." In 2008 Second International Conference on Emerging Security Information, Systems and Technologies (SECUREWARE). IEEE, 2008. http://dx.doi.org/10.1109/securware.2008.74.
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DaiHong, Zhong Runtong, and LanTian. "Risk assessment management for mobile payment security." In 2008 IEEE International Conference on Service Operations and Logistics, and Informatics. IEEE, 2008. http://dx.doi.org/10.1109/soli.2008.4682854.
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Huang, Hanyan. "Research on the security of online payment." In 2015 2nd International Conference on Electrical, Computer Engineering and Electronics. Paris, France: Atlantis Press, 2015. http://dx.doi.org/10.2991/icecee-15.2015.71.
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Wang, Zhenqi, Ziyan Guo, and Yue Wang. "Security Research on J2ME-Based Mobile Payment." In 2008 ISECS International Colloquium on Computing, Communication, Control, and Management. IEEE, 2008. http://dx.doi.org/10.1109/cccm.2008.216.
Full textReports on the topic "Security of payment"
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Marcos Morezuelas, Paloma. Gender, Forests and Climate Change. Inter-American Development Bank, March 2021. http://dx.doi.org/10.18235/0003072.
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As users of forest products and guardians of traditional knowledge, women have always been involved in forestry. Nevertheless, their access to forest resources and benefits and participation in forest management is limited compared to mens despite the fact that trees are more important to women, who depend on them for their families food security, income generation and cooking fuel. This guide aims to facilitate the incorporation of a gender lens in climate change mitigation and adaptation operations in forests, with special attention to those framed in REDD. This guide addresses four themes value chains, environmental payment schemes, firewood and biodiversity that relate directly to 1) how climate change impacts affect women in the forest and 2) how mitigation and adaptation measures affect womens access to resources and benefits distribution.
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Gross, Tal, Timothy Layton, and Daniel Prinz. The Liquidity Sensitivity of Healthcare Consumption: Evidence from Social Security Payments. Cambridge, MA: National Bureau of Economic Research, October 2020. http://dx.doi.org/10.3386/w27977.
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Romer, Christina, and David Romer. Transfer Payments and the Macroeconomy: The Effects of Social Security Benefit Changes, 1952-1991. Cambridge, MA: National Bureau of Economic Research, May 2014. http://dx.doi.org/10.3386/w20087.
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LEONOV, T. M., V. M. BOLSHAKOVA, and P. YU NAUMOV. THEORETICAL AND LEGAL ASPECTS OF PROVIDING MEDICAL ASSISTANCE TO EMPLOYEES OF THE MILITARY PROSECUTOR’S OFFICE. Science and Innovation Center Publishing House, 2021. http://dx.doi.org/10.12731/2576-9634-2021-5-4-12.
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The work is devoted to a comprehensive study of medical support, incl. sanatorium-resort treatment of employees of the military prosecutor’s office and members of their families (persons who are dependent on them). It is noted that health care is structurally included in services that, in addition to cash payments and benefits in kind, represent the entire social security system. The main attention in the article is focused on the analysis of the normative legal regulation of the health protection of employees of the military prosecutor’s office, as well as the provision of medical assistance to them (prophylactic medical examination, medical examination, military medical examination, medical and psychological rehabilitation, sanatorium treatment, reimbursement of expenses for drugs and treatment) of proper quality and in the required volume. The key scientific results of the study are the generalization of legal information and scientific knowledge about the procedure for providing medical assistance to employees of the military prosecutor’s office. The main scientific results of the article can be applied to organize training in the discipline «Military law and military legislation». The article will be of interest to persons conducting scientific research on the problems of social protection of servicemen and their families.
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Lambermont, Serge, and Niels De Boer. Unsettled Issues Concerning Automated Driving Services in the Smart City Infrastructure. SAE International, December 2021. http://dx.doi.org/10.4271/epr2021030.
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Information and communication technology is fundamentally changing the way we live and operate in cities, such as instant access to events, transportation, bookings, payments, and other services. At the same time, three “megatrends” in the automotive industry—self-driving, electrification, and advanced manufacturing technology—are enabling the design of innovative, application-specific vehicles that capitalize on city connectivity. Applications could countless; however, they also need to be safe and securely integrated into a city’s physical and digital infrastructure, and into the overall urban ecosystem. Unsettled Issues Concerning Automated Driving Services in the Smart City Infrastructure examines the current state of the industry, the developments in automated driving and robotics, and how these new urban, self-driving city applications are different. It also analyzes higher level challenges for urban applications. Ultimately, this report includes several options for sharing lessons learned among different cities and their stakeholders.
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Payment Systems Report - June of 2021. Banco de la República, February 2022. http://dx.doi.org/10.32468/rept-sist-pag.eng.2021.
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Banco de la República provides a comprehensive overview of Colombia’s finan¬cial infrastructure in its Payment Systems Report, which is an important product of the work it does to oversee that infrastructure. The figures published in this edition of the report are for the year 2020, a pandemic period in which the con¬tainment measures designed and adopted to alleviate the strain on the health system led to a sharp reduction in economic activity and consumption in Colom¬bia, as was the case in most countries. At the start of the pandemic, the Board of Directors of Banco de la República adopted decisions that were necessary to supply the market with ample liquid¬ity in pesos and US dollars to guarantee market stability, protect the payment system and preserve the supply of credit. The pronounced growth in mone¬tary aggregates reflected an increased preference for liquidity, which Banco de la República addressed at the right time. These decisions were implemented through operations that were cleared and settled via the financial infrastructure. The second section of this report, following the introduction, offers an analysis of how the various financial infrastructures in Colombia have evolved and per¬formed. One of the highlights is the large-value payment system (CUD), which registered more momentum in 2020 than during the previous year, mainly be¬cause of an increase in average daily remunerated deposits made with Banco de la República by the General Directorate of Public Credit and the National Treasury (DGCPTN), as well as more activity in the sell/buy-back market with sovereign debt. Consequently, with more activity in the CUD, the Central Securi¬ties Depository (DCV) experienced an added impetus sparked by an increase in the money market for bonds and securities placed on the primary market by the national government. The value of operations cleared and settled through the Colombian Central Counterparty (CRCC) continues to grow, propelled largely by peso/dollar non-deliverable forward (NDF) contracts. With respect to the CRCC, it is important to note this clearing house has been in charge of managing risks and clearing and settling operations in the peso/dollar spot market since the end of last year, following its merger with the Foreign Exchange Clearing House of Colombia (CCDC). Since the final quarter of 2020, the CRCC has also been re¬sponsible for clearing and settlement in the equities market, which was former¬ly done by the Colombian Stock Exchange (BVC). The third section of this report provides an all-inclusive view of payments in the market for goods and services; namely, transactions carried out by members of the public and non-financial institutions. During the pandemic, inter- and intra-bank electronic funds transfers, which originate mostly with companies, increased in both the number and value of transactions with respect to 2019. However, debit and credit card payments, which are made largely by private citizens, declined compared to 2019. The incidence of payment by check contin¬ue to drop, exhibiting quite a pronounced downward trend during the past last year. To supplement to the information on electronic funds transfers, section three includes a segment (Box 4) characterizing the population with savings and checking accounts, based on data from a survey by Banco de la República con-cerning the perception of the use of payment instruments in 2019. There also is segment (Box 2) on the growth in transactions with a mobile wallet provided by a company specialized in electronic deposits and payments (Sedpe). It shows the number of users and the value of their transactions have increased since the wallet was introduced in late 2017, particularly during the pandemic. In addition, there is a diagnosis of the effects of the pandemic on the payment patterns of the population, based on data related to the use of cash in circu¬lation, payments with electronic instruments, and consumption and consumer confidence. The conclusion is that the collapse in the consumer confidence in¬dex and the drop in private consumption led to changes in the public’s pay¬ment patterns. Credit and debit card purchases were down, while payments for goods and services through electronic funds transfers increased. These findings, coupled with the considerable increase in cash in circulation, might indicate a possible precautionary cash hoarding by individuals and more use of cash as a payment instrument. There is also a segment (in Focus 3) on the major changes introduced in regulations on the retail-value payment system in Colombia, as provided for in Decree 1692 of December 2020. The fourth section of this report refers to the important innovations and tech¬nological changes that have occurred in the retail-value payment system. Four themes are highlighted in this respect. The first is a key point in building the financial infrastructure for instant payments. It involves of the design and im¬plementation of overlay schemes, a technological development that allows the various participants in the payment chain to communicate openly. The result is a high degree of interoperability among the different payment service providers. The second topic explores developments in the international debate on central bank digital currency (CBDC). The purpose is to understand how it could impact the retail-value payment system and the use of cash if it were to be issued. The third topic is related to new forms of payment initiation, such as QR codes, bio¬metrics or near field communication (NFC) technology. These seemingly small changes can have a major impact on the user’s experience with the retail-value payment system. The fourth theme is the growth in payments via mobile tele¬phone and the internet. The report ends in section five with a review of two papers on applied research done at Banco de la República in 2020. The first analyzes the extent of the CRCC’s capital, acknowledging the relevant role this infrastructure has acquired in pro¬viding clearing and settlement services for various financial markets in Colom¬bia. The capital requirements defined for central counterparties in some jurisdic¬tions are explored, and the risks to be hedged are identified from the standpoint of the service these type of institutions offer to the market and those associated with their corporate activity. The CRCC’s capital levels are analyzed in light of what has been observed in the European Union’s regulations, and the conclusion is that the CRCC has a scheme of security rings very similar to those applied internationally and the extent of its capital exceeds what is stipulated in Colombian regulations, being sufficient to hedge other risks. The second study presents an algorithm used to identify and quantify the liquidity sources that CUD’s participants use under normal conditions to meet their daily obligations in the local financial market. This algorithm can be used as a tool to monitor intraday liquidity. Leonardo Villar Gómez Governor
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Financial Stability Report - First Semester of 2020. Banco de la República de Colombia, March 2021. http://dx.doi.org/10.32468/rept-estab-fin.1sem.eng-2020.
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In the face of the multiple shocks currently experienced by the domestic economy (resulting from the drop in oil prices and the appearance of a global pandemic), the Colombian financial system is in a position of sound solvency and adequate liquidity. At the same time, credit quality has been recovering and the exposure of credit institutions to firms with currency mismatches has declined relative to previous episodes of sudden drops in oil prices. These trends are reflected in the recent fading of red and blue tonalities in the performance and credit risk segments of the risk heatmaps in Graphs A and B.1 Naturally, the sudden, unanticipated change in macroeconomic conditions has caused the appearance of vulnerabilities for short-term financial stability. These vulnerabilities require close and continuous monitoring on the part of economic authorities. The main vulnerability is the response of credit and credit risk to a potential, temporarily extreme macroeconomic situation in the context of: (i) recently increased exposure of some banks to household sector, and (ii) reductions in net interest income that have led to a decline in the profitability of the banking business in the recent past. Furthermore, as a consequence of greater uncertainty and risk aversion, occasional problems may arise in the distribution of liquidity between agents and financial markets. With regards to local markets, spikes have been registered in the volatility of public and private fixed income securities in recent weeks that are consistent with the behavior of the international markets and have had a significant impact on the liquidity of those instruments (red portions in the most recent past of some market risk items on the map in Graph A). In order to adopt a forward-looking approach to those vulnerabilities, this Report presents a stress test that evaluates the resilience of credit institutions in the event of a hypothetical scenario thatseeks to simulate an extreme version of current macroeconomic conditions. The scenario assumes a hypothetical negative growth that is temporarily strong but recovers going into the middle of the coming year and has extreme effects on credit quality. The results suggest that credit institutions have the ability to withstand a significant deterioration in economic conditions in the short term. Even though there could be a strong impact on credit, liquidity, and profitability under the scenario being considered, aggregate capital ratios would probably remain at above their regulatory limits over the horizon of a year. In this context, the recent measures taken by both Banco de la República and the Office of the Financial Superintendent of Colombia that are intended to help preserve the financial stability of the Colombian economy become highly relevant. In compliance with its constitutional objectives and in coordination with the financial system’s security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth functioning of the payment system. Juan José Echavarría Governor
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Financial Stability Report - Second Semester of 2021. Banco de la República, September 2022. http://dx.doi.org/10.32468/rept-estab-fin.sem2.eng-2021.
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Banco de la República’s main objective is to preserve the purchasing power of the currency in coordination with the general economic policy that is intended to stabilize output and employment at long-term sustainable levels. Properly meeting the goal assigned to the Bank by the 1991 Constitution critically depends on preserving financial stability. This is understood to be a general condition in which the financial system assesses and manages the financial risks in a way that facilitates the economy’s performance and efficient allocation of resources while, at the same time, it is able to, on its own, absorb, dissipate, and mitigate the shocks that may arise as a result of adverse events. This Financial Stability Report meets the goal of giving Banco de la República’s diagnosis of the financial system’s and its debtors’ recent performance as well as of the main risks and vulnerabilities that could affect the stability of the Colombian economy. In this way, participants in financial markets and the public are being informed, and public debate on trends and risks affecting the system is being encouraged. The results presented here also serve the monetary authority as a basis for making decisions that will enhance financial stability in the general context of its objectives. In recent months, several positive aspects of the financial system have preserved a remarkable degree of continuity and stability: the liquidity and capital adequacy of financial institutions have remained well above the regulatory minimums at both the individual and consolidated levels, the coverage of past-due loans by loan-loss provisions remains high, and the financial markets for public and private debt and stocks have continued to function normally. At the same time, a surge in all the types of loan portfolios, a sharp downturn in the non-performing loan portfolio, and a rise in the profitability of credit institutions can be seen for the first time since the beginning of the pandemic. In line with the general recovery of the economy, the main vulnerability to the stability of the Colombian financial system identified in the previous edition—uncertainty about changes in the non-performing loans portfolio—has receded and remains on a downward trend. In this edition, the main source of vulnerability identified for financial stability in the short term is the system’s exposure to sudden changes in international financial conditions; the results presented in this Report indicate that the system is sufficiently resilient to such scenarios. In compliance with its constitutional objectives and in coordination with the financial system’s security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth functioning of the payment system. Leonardo Villar Gomez Governor Box 1 -Decomposition of the Net Interest Margin in Colombia and Chile Wilmar Cabrera Daniela Rodríguez-Novoa Box 2 - Spatial Analysis of New Home Prices in Bogota, Medellín, and Cali Using a Geostatistical Approach María Fernanda Meneses Camilo Eduardo Sánchez Box 3 - Interest Rate Model for the SYSMO Stress Test Exercise Wilmar Cabrera Diego Cuesta Santiago Gamba Camilo Gómez Box 4 - The Transition from LIBOR and other International Benchmark Rates Daniela X. Gualtero Briceño Javier E. Pirateque Niño
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Financial Stability Report - Second Semester of 2020. Banco de la República de Colombia, March 2021. http://dx.doi.org/10.32468/rept-estab-fin.sem2.eng-2020.
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The Colombian financial system has not suffered major structural disruptions during these months of deep economic contraction and has continued to carry out its basic functions as usual, thus facilitating the economy's response to extreme conditions. This is the result of the soundness of financial institutions at the beginning of the crisis, which was reflected in high liquidity and capital adequacy indicators as well as in the timely response of various authorities. Banco de la República lowered its policy interest rates 250 points to 1.75%, the lowest level since the creation of the new independent bank in 1991, and provided ample temporary and permanent liquidity in both pesos and foreign currency. The Office of the Financial Superintendent of Colombia, in turn, adopted prudential measures to facilitate changes in the conditions for loans in effect and temporary rules for rating and loan-loss provisions. Finally, the national government expanded the transfers as well as the guaranteed credit programs for the economy. The supply of real credit (i.e. discounting inflation) in the economy is 4% higher today than it was 12 months ago with especially marked growth in the housing (5.6%) and commercial (4.7%) loan portfolios (2.3% in consumer and -0.1% in microloans), but there have been significant changes over time. During the first few months of the quarantine, firms increased their demands for liquidity sharply while consumers reduced theirs. Since then, the growth of credit to firms has tended to slow down, while consumer and housing credit has grown. The financial system has responded satisfactorily to the changes in the respective demands of each group or sector and loans may grow at high rates in 2021 if GDP grows at rates close to 4.6% as the technical staff at the Bank expects; but the forecasts are highly uncertain. After the strict quarantine implemented by authorities in Colombia, the turmoil seen in March and early April, which was evident in the sudden reddening of macroeconomic variables on the risk heatmap in Graph A,[1] and the drop in crude oil and coal prices (note the high volatility registered in market risk for the region on Graph A) the local financial markets stabilized relatively quickly. Banco de la República’s credible and sustained policy response played a decisive role in this stabilization in terms of liquidity provision through a sharp expansion of repo operations (and changes in amounts, terms, counterparties, and eligible instruments), the purchases of public and private debt, and the reduction in bank reserve requirements. In this respect, there is now abundant aggregate liquidity and significant improvements in the liquidity position of investment funds. In this context, the main vulnerability factor for financial stability in the short term is still the high degree of uncertainty surrounding loan quality. First, the future trajectory of the number of people infected and deceased by the virus and the possible need for additional health measures is uncertain. For that reason, there is also uncertainty about the path for economic recovery in the short and medium term. Second, the degree to which the current shock will be reflected in loan quality once the risk materializes in banks’ financial statements is uncertain. For the time being, the credit risk heatmap (Graph B) indicates that non-performing and risky loans have not shown major deterioration, but past experience indicates that periods of sharp economic slowdown eventually tend to coincide with rises in non-performing loans: the calculations included in this report suggest that the impact of the recession on credit quality could be significant in the short term. This is particularly worrying since the profitability of credit establishments has been declining in recent months, and this could affect their ability to provide credit to the real sector of the economy. In order to adopt a forward-looking approach to this vulnerability, this Report presents several stress tests that evaluate the resilience of the liquidity and capital adequacy of credit institutions and investment funds in the event of a hypothetical scenario that seeks to simulate an extreme version of current macroeconomic conditions. The results suggest that even though there could be strong impacts on the credit institutions’ volume of credit and profitability under such scenarios, aggregate indicators of total and core capital adequacy will probably remain at levels that are above the regulatory limits over the horizon of a year. At the same time, the exercises highlight the high capacity of the system's liquidity to face adverse scenarios. In compliance with its constitutional objectives and in coordination with the financial system's security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth operation of the payment systems. Juan José Echavarría Governor