Visa championing 'responsible innovation' in China

Ellen Richey (center), vice-chairman of risk and public policy for Visa Inc, shakes hands with Li Jinzao (left), general director of the China National Tourism Administration, at the launch of 2016 China-US Tourism Year on Feb 29 in Beijing. CHINA DAILY

Ellen Richey, chief of Visa Inc's risk and public policy, swears by clear standards and war on static data

As vice-chairman in charge of risk and public policy for Visa Inc, Ellen Richey is the company's voice for lawmakers, regulators and clients globally. They hear her often on topics like payment system security.

One of her major tasks is to ensure Visa continues to drive the future of payments security.

Tremendous changes are taking place in the payments industry, driving innovation through wider application of Internet technologies, she said.

Asked about striking a balance between security and innovation, Richey said, "Security has to be No 1. We can't have insecure innovation. That's why we call it responsible innovation."

Visa is keen to make the security standards clear so that people could develop innovative solutions that are also acceptable from a security standpoint.

"The idea is that we make standards so that everybody is on a level playing field in order to develop innovations that will be secure," she said.

The company announced in February the launch of the Visa Developer platform to drive innovation in payments and commerce. The platform allows software application developers to have open access to some of Visa's most popular payments technologies and services, including account holder identification and person-to-person payment capabilities.

The company is constantly researching new security technologies such as biometrics. It is working with the companies that are doing biometrics research to determine what types of standards should be applied. Furthermore, it is looking for whatever technologies that may be next.

Richey said a huge opportunity to support innovation lies in China. Visa wants to develop local solutions, especially when mobile payments are fast becoming popular.

"We think by coming to China, we can support the secure development of mobile payments so that they will use technologies like tokenization and biometric authentication with your fingerprints, eyes and voice.

"All those things will make mobile payments even more secure than plastic payments. But the important point is you have to do it at the beginning. You can't start with something insecure and then try to build security on it after. It's usually quite a bit difficult to catch up later," she said.

Richey joined Visa in 2007. Before assuming her current role in October 2014, she concurrently served as chief legal officer and chief risk officer of the company. Prior, she had many years of experience in enterprise risk management at Washington Mutual Inc and Providian Financial Corporation.

"Trust is a key element of any payments system," she said. "You have to have trust that when you put your payments credential into a merchant, it won't be stolen. You have to have trust that the transaction will be accurate and reliable."

In order to maintain trust, every market player has to participate in data protection. Payments technology companies like Visa, for instance, will create a dynamic code every time a client uses his/her card. So if someone steals the card information, they cannot use it to commit fraud.

"One of our No 1 priorities is to take the static data out of the system wherever we can. So chip cards and tokenization are extremely important to us," she said.

At the same time, Visa is trying hard to ensure that all the players in the system follow its data security standards and develop common standards for innovation.

It will be interesting with new companies coming into the picture, she said, for they will provide new payments devices like cars, refrigerators or other Internet of Things-enabled devices that are not used to the type of security expected by leading payments technology companies.

Apple Inc launched a smartphone-based payments system called Apple Pay in China on February 18. There are three layers of security in the phone: First, Apple Pay assigns, encrypts and stores a unique device account number on an iPhone or Apple Watch, instead of storing the actual credit or debit card number. Second, the payments system creates a dynamic security code to validate each transaction. Third, to access the payments application, a client has to use his/her fingerprint to operate into the device.

Richey said Visa will bring the same type of security if clients are going to make a payment with their car or their refrigerator.

"We will have a very clear separation of payments portion of the infrastructure from the rest of the device. We'll ensure that portion of the device is made to our standards and not made to whatever standards they may apply in their industry," she said.

Consumer-centered commerce is growing rapidly in China, with the idea that the consumer is in the center of the picture at anytime through new types of devices.

"Chinese people are technologically advanced, therefore in the forefront of adopting mobile payments. It will be interesting for me to see whether the Chinese payment environment will adapt quickly to the Internet of Things," she said. "Both the scale and the willingness of people to try new things are favorable for our industry as long as we do it right from the start."

Born on the east coast of the United States, she took a great interest in languages in her education, majored in linguistics and Far Eastern languages when she went to Harvard University.

She studied Chinese back in the 1960s and early 1970s but has not used it since then. When she was attending a launch ceremony for the China-US Tourism Year in Beijing in February, she asked her colleague to make a footnote of the tones for each Chinese character in a sentence that she wanted to say to the audience.

Interested in travel, she first entered the workforce as a flight attendant for two years. Later, she realized that airline business is very risky economically and went to Stanford Law School, following her father's footsteps to become a lawyer.

She worked for a law firm in California and then for a bank that had a very large payment business, moving gradually from the legal to the risk management profession in the banking industry.

"As a woman in the financial industry, when you do find yourself in a room full of men by yourself, that can be challenging," she said.

"I think women are strong leaders. I don't really subscribe to stereotypes about women when you say they are more sensitive or have more emotional intelligence. Maybe so, but I do think what's important is to have this balance so that you have different points of view and different life experiences represented."

CLOSE-UP

Ellen Richey

Vice-chairman of risk and public policy for Visa Inc Nationality: USA

Education:

1970: Bachelor of Arts in Linguistics and Far Eastern Languages, Harvard University

1977: Juris Doctorate at Stanford Law School and Urban A. Sontheimer Third-Year Honor

Career:

1994-2005: Vice-chairman of Enterprise Risk Management, Chief Legal Officer and Secretary, Providian Financial Corporation

2005-06: Executive Vice President, Card Services, Washington Mutual Inc

Oct 2014-June 2015: Chief Legal Officer and Chief Enterprise Risk Officer, Visa Inc

July 2015-present: Vice-chairman, risk and public policy, Visa Inc