In January the EBA will publish its final proposed standards in response to the requirements of the Payment Services Directive, which mandates strong customer authentication (SCA) for all electronic payments.
SCA means that for every transaction over EUR10, online shoppers will have to go through additional steps – such as entering passwords, codes or using a card reader – at checkout.
Visa says that this means the end of the kind of one-click checkouts seen at sites such as Amazon and no more fast, automatic in-app payments where cards are already stored.
With Visa data showing that, across Europe, express online checkouts currently make up half of all today’s total e-commerce sales, the card giant says the changes will prove a massive setback for retailers and shoppers.
The firm has commissioned a survey which shows that just over half of Brits would abandon purchases if more steps are added to the checkout process.
International websites selling to European consumers will also have to follow the new rules or purchases will be automatically declined. Meanwhile, we could also see longer queues and issues using cards at places like toll booths and parking where PINs are not required today.
Peter Bayley, chief risk officer, Europe, Visa, says: “These new proposals threaten to seriously disrupt the way we all shop. The plans will bring a host of complications and inconveniences including more declined transactions and longer and more complicated checkout experiences with little if any benefit to consumers.
“Managing payments is always about balancing security and convenience. If you tip the balance too far one way, you end up making it either too difficult or too risky for consumers to make purchases wherever, whenever and on whatever device they want. Either way it annoys consumers and damages businesses’ potential to sell their goods and services.”
Bayley says that there is not even any evidence that the SCA rules will cut fraud, claiming that the current risk-based authentication system works, with fraud on Visa cards at less than five cents in every EUR100 spent.