Banks and businesses have expressed concern over proposed European Union (EU) rules that would require “strong customer authentication” (SCA) for all electronic payments made on values over €10 (US$10.50), claiming that requiring additional security information could result in lost online sales of more than €11bn annually.
The new proposed standards have been drawn up by the European Banking Authority (EBA) in response to requirements in the Payment Services Directive (PSD”) with the aim of making online transactions safer for consumers. However, they would also lengthen the process of making an online purchase.
Business groups, credit-card companies and e-commerce associations are concerned that making online purchases too cumbersome could deter customers, while consumer advocates retort that there is no trade-off between antifraud protections and promoting e-commerce.
Reports suggest that the SCA required is most likely to take the form of passwords, one-time codes or using a physical card reader. With the average online retail purchase in Europe in 2016 at around €80, the extra security measures would be applied to most transactions within the EU.
According to payments technology company Visa Europe this would be enough to put €11.2bn of online sales a year at risk, equivalent to around 2% of Europe’s e-commerce market, which is estimated to have totalled more than €510bn last year.
A survey of more than 5,000 adults across Europe, conducted on behalf of Visa, indicated that 61% of consumers would abandon purchases if more steps were added to the online payment process.
At the same time, there is general agreement that online security measures need to be strengthened to protect consumers against online fraud. An 18% increase in the UK’s level of credit card fraud last year was attributable mainly to online purchases.
One alternative to a lengthier checkout process that has been suggested is increasing the use of mobile devices, whose sophisticated technology can collect and combine identifying factors such as the location, manufacturer and operating system, enabling it to become a permanent ID for its owner.
Once a customer is tied to a permanent device ID, organisations can recognise and trust returning devices, enabling buyers to complete transactions faster and more securely.
Leaked documents from the UK Home Office proposing that low-skilled EU migrants would be restricted in the UK’s post-Brexit immigration scheme may be more likely to increase automation and off-shoring of labour, rather than increase British wages, industry experts have warned.
The European Central Bank's (ECB) hotly anticipated meeting on Thursday afternoon made the euro skyrocket, as president Mario Draghi announced interest rates would remain at 0% and its quantitative easing programme will stay until at least the end of 2017.
The “sad truth” of banking is that many jobs will be automated in the future, Deutsche Bank's chief executive said yesterday. Despite this, a recent survey found that 98% of European workers are optimistic about the changes automation will bring to their workplace.
The dollar failed to recover against other major currencies on Monday following Friday’s disappointing US employment data announcement. This was coupled with ... read more