The European Commission hopes to reduce rising fraud rates through a new ruling that will provide greater authentication of electronic transactions, which have skyrocketed in the e-commerce era.
Share to twitterAs e-commerce rises globally, consumers are utilizing electronic payment methods more frequently to execute purchases. In 2019, global consumers will spend an estimated $6.77 trillion on goods and services bought online, according to Euromonitor International. This is double the digital commerce spend from just five years ago.
Under the SCA ruling, merchants, banks and payment processors will have to implement two-factor verification on electronic transactions over €30. Such transactions in the future will require two of three authentication methods, including personal identification, such as a fingerprint, something the consumer owns, such as a smartphone, or something the consumer knows, such as a password.
“Merchants have done everything to optimize the consumer journey over the years and now suddenly this regulation will cause more friction,” Charles Damen, senior vice president of payments strategy for payment processor Worldpay, said in an interview with Euromonitor International at Money20/20 Europe. “I do think there will be chaos initially. What has not happened enough is that both issuers and certain merchants have not really communicated about the impact to their consumers.
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