Wrapping up the Year 2020

Dear Clients and Industry Colleagues, this is the end of year email where we take the opportunity to wish every one of our clients and industry colleagues our season greetings and best wishes for 2021.

The year 2020 has been too extraordinary however to end without some reflections; clearly we are referring to the Corona virus which has disrupted the lives of everyone and caused death and suffering to so many families.

I had read the book The Great Influenza by John M Barry, so I had some fore knowledge of what to expect. I even had a small supply of masks, and even for someone who hates clutter, it seemed like a trivial and sensible investment to make, with potentially an enormous upside, which turned out to be correct when mask prices shot up to 40 times as much.

The book describes in great detail how the virus reached every corner of the world with the exception of one remote island. This is truly amazing given that in 1918 the vast majority of people, even in developed countries, had never ridden a car or travelled further than 100 miles from their place of habitat. The war mobilization did however play a role and took the place of the mass travel that is typical of our age. It’s some consolation that a hundred years on, humanity is mobilized for work and pleasure rather than war.

The book describes the first and second and final third waves, which is exactly what we are seeing; no cure was ever found, the virus essentially disappeared into the background and was last detected in 1959. Masks made their appearance then and the scientific community garnered its resources confident in their scientific knowledge, but ultimately failed chasing false leads. Again the parallels are very clear, with the exception that maybe this time we have managed to create a vaccine.

Switching back to our industry, payments and ecommerce played a major role in this crisis and technology enabled life to go on through remote work, video conferences, and online shopping. We were spared many of the horrors that afflicted humanity a century ago. At the outbreak of the pandemic, we at Endeavour took measures to ensure increased capacity and business continuity in case of sickness and worked hard with our clients to add thousands of new merchants. We can take pride in knowing that our efforts, working remotely and round the clock in a super connected world made a positive impact of the lives of many people.

The changes we saw in 2020 will have a lasting impact; it has accelerated by many years changes which were already in progress. There is no going back, our attitudes towards remote work, video meetings and living digital lives are here to stay. The question is, were we ready enough? Security has become the primary focus and in general we could have been better prepared. Concerns about video conferencing, for example, very quickly popped up and this was far from being a problem with any one product, but an industry wide malaise.

Digital payments did not fare any better. We missed the 2019 deadline to mandate the use of SCA and so went into the pandemic with all the risk of chargebacks and fraud which we have come to accept as normal for the last 20 years. Recently I had the awkward task of explaining to a group of incredulous millennials how chargebacks work and how even after getting the money, you might still have to return it! The mandate for SCA in PSD2 is therefore a welcome development to shake the industry out of the ridiculous state of affairs which has set in for the last 20 years. It’s a pity it has taken 20 years to get here, but that seems to be the lag between innovation and regulation and something we should keep in mind.

Now one would think that being involved in 3DSecure, I would be in favour of regulation; I am however wary of progress driven solely by regulation. Regulation is good when it is used to set the bar higher and to challenge technology to try for a moon shot, such as with emissions targets. But innovation must first and foremost be driven by customers – providing tools for a better world. This is the spirit that drove the birth of the IT industry, and we must never lose sight of that fact in spite of all the corporations and profit projections. Regulation plays a role when the customer is powerless against the intransigence of some industry, such as in the often cited car industry and even the tobacco industry, but regulation can be hijacked to create artificial forced demand, to push nonsense that an open market would reject and sacrifice innovation in pursuit of control.

We are also reminded that this year saw massive riots across the world, but in particular in the USA which exerts a huge cultural influence around the world; after all, the ongoing riots in France did not inspire similar actions in Europe let alone the world. We have to acknowledge that there are structural faults in our society and these like the proverbial straw that breaks the camel’s back can trigger a collapse of law and order at incomprehensible speeds. This was another reminder of how little control we truly exert on nature and our own human affairs.

This year had to end, of course, with a massive Hack, possibly the worst hacking incident thus far. As someone who has spent a lot of time on security issues, I am well aware of the dangers of trusting blindly in vendor solutions, that security products can create as many vulnerabilities as they mitigate; we have to admit that the security industry is essentially broken; it’s an opportunistic industry that has grown as a patchwork of uncoordinated solutions and that it is ultimately driven by the pursuit of profit. Unfortunately we are not ready to learn the hard lessons yet; this hack will be followed by patchwork of regulations and red tape again driven solely by profit as we add a new layer of patches to patch up the patch industry!

What is needed is a rethink of security – to make technology secure by design. Security must be an integral part of the product and not problem that will be solved by someone else. Unfortunately many in the industry still work with a mindset more suitable for the technical realities of the 1980s. The technologies that take us in the right direction are already at our finger tips. Endeavour has championed the SaaS model for the last 20 years and is a pioneer in offering 3DSecure as a service. What the last 20 years have thought us is that under the SaaS model, security is not someone else’s problem. Creating secure products by design then becomes a natural progression and the result is a fully integrated system as opposed to a patchwork of unrelated products.

The other important step is of course the creation of standards, but here caution is required that standards do not become an obstacle to progress and innovation. Standards risk becoming the new vendor trap and is as likely to be driven by profit above all else.

So that wraps up what was supposed to be a jolly uplifting message for the end of the year. But we should be counting our blessings and be thankful for resourcefulness which humanity has shown this year. It is up to us to now take away the lessons which are to be learned and to continue into this new decade with re-adjusted priorities, a better sense of our place on this earth and willing to choose wisdom over convenience or greed. Let 2020 be memorable for the foresight it gave us.

Vincent Bezzina, CEO, Endeavour 3DSecure