EU law to prevent online payment fraud to be introduced September 2019
From September 2019, online shoppers will need to take an additional authentication step when making online purchases over €30 online.
Fraud is a major problem in the UK. Criminals stole £1.2 billion through fraud and scams in 2018. Personal and financial data theft allows much of this fraud to happen. The Revised Payment Service Directive (PSD2) aims to prevent this by using extra security steps to online purchases.
What does PSD2 mean for my business?
The new rules apply to any purchase over €30 and will prompt users to enter an additional form of verification such as a PIN. These requirements are also known as Strong Customer Authentication (SCA).
The new legislation applies to all banks in Europe and requires them to use two-factor authentication on online purchases over €30. Any retailer or e-commerce business that doesn’t meet these new standards will have purchases declined by the bank.
The new rules will apply to transactions where the business and the cardholder’s bank are located in the European Economic Area. This is expected to be the case regardless of the outcome of Brexit.
Customers may be able to ‘whitelist’ their favourite online retailers to they don’t need to take additional security steps each time they make a purchase.