A set of new European proposals threatens to seriously disrupt the way we all shop online today.
Consumers will no longer be able to make express checkouts - half of all today’s e-commerce sales - even at online retailers they shop at all the time. And there will be no more fast, automatic payments where cards are already securely stored or quick in-app payments from mobiles.
Consumer research conducted for Visa shows this will have a real impact - 61% say increased checkout steps will cause them to abandon purchases.
There will also be reduced access to e-commerce sites outside Europe potentially impacting around €6bn of transactions. And there will be longer queues and issues using cards at places like toll booths and parking where PINs are not required today.
The European Banking Authority (EBA) proposals cover how it will implement what is called strong customer authentication. The plans mean that every online transaction over €10 will require additional steps at checkout such as entering passwords, codes or using a card reader.
Visa completely supports strong security measures. We have championed secure authentication but it has to be based on the true risk of the transaction, not a blunt ‘one-size fits all’ approach.
We are calling on the EBA to allow risk based authentication where intelligent risk decisions can be made based on what payment service providers (such as banks) and retailers know about their customers.
E-commerce has been a European success story in a time of weak overall economic growth but this initiative threatens to slow that growth and reduce the competitiveness of European businesses against competitors from other parts of the globe. And crucially, consumers will face a host of complications and inconveniences including more declined transactions and longer and more complicated checkout experiences with little, if any, benefit.
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