How the new EU rules will protect your online payments

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Any business in Ireland that sells products or services online must upgrade their payment system to be ready for a new regulation called Strong Customer Authentication (SCA) from July 1.

SCA’s goal is to reduce fraud by adding an extra layer of security to online payments to ensure a payment comes from the authorized cardholder.

However, new research from Visa shows that many businesses are still unprepared.

What should companies implement?

To prepare for this new regulation, e-commerce companies will need to add a form of technology called 3D Secure to their online payment.

Dominic White, acting national director for Ireland, Visa explained that the technology scans payments as they arrive, to determine if they appear likely to be fraudulent.

“This allows banks to verify the authenticity of the customer by asking them for more proof of their identity,” White said.

Mr White told Visa they believe the best way to ensure customer payments support settlement is to add the latest version of this technology – EMV 3D Secure.

“This version gives banks more information about a payment, so they can be sure it is the customer and not a fraudster – and is more suitable for use on cellphones and other devices. smart, ”he explained.

How are companies implementing this new payment system?

Despite all the technical terms, Mr. White said preparing for SCA is pretty straightforward.

He said the first thing a business should do is contact their merchant bank or the company that provides their online payment service and ask them to “activate” 3D Secure or the enhanced version, EMV 3D. Secure, to support regulation.

“For a better customer experience, businesses can work with their bank to help identify certain types of payments that might be exempt from SCA and, therefore, may not need customers to take additional action before a payment is made. be allowed – for example, some low-cost payments, value payments, ”he said.

What will happen if companies don’t make these changes?

Many companies in Ireland have already taken the necessary steps to implement the technology needed to support SCA.

However, for those who haven’t, consumers may experience disruption, as White explained.

“If an online site is not set up for SCA, customers’ banks can refuse purchases over a certain amount, risking abandoning purchases at the checkout,” he said.

He said it could lead to a bad shopping experience for the customer if they can’t complete their purchase.

“This could lead to lost sales, which is bad news, especially for small independent businesses,” he said.

Are Irish businesses prepared for these changes?

Research by Visa shows that adoption of the required technology among large e-commerce companies in Ireland has increased at an accelerating rate since December.

“Today, more than three-quarters of large e-commerce companies in Ireland have implemented some form of the required technology (3D Secure), and 65% are equipped with the best version of that technology – EMV 3D Secure, ”White said.

Although this is an uptake increase of 15% and 26% respectively since December, it shows that a significant number of companies are still not ready for the SCA.

Mr White said they wanted to remind small independent businesses that may not be aware of the new regulations to contact their bank or payment provider so they are not left behind.

Will consumers notice a difference once this new service is in place?

For most online purchases over a certain amount, the consumer will be asked to confirm that they are the cardholder by verifying their identity.

Many consumers may have already noticed that when shopping online, they are now required to provide additional ID as more and more businesses prepare for SCA.

SCA uses two-factor authentication, as Mr. White explained. “It’s a secure digital way to confirm that the authorized user is the person using the card online.

“The cardholder will be asked to provide two pieces of information to verify their identity, for example something they know, such as a password; something he has, like a phone or a card reader, or something related to who he is, like facial recognition or a fingerprint, ”he explained.

Should consumers take action with their bank?

Customers will have received information about upcoming regulations from their banks, and it is likely that some will have already experienced two-factor authentication when making an online purchase.

But if for some reason a consumer has not heard from their bank regarding SCA, Mr White said he should contact them to make sure all of his information is up to date.

How will these new rules improve protection for businesses and consumers?

SCA adds an additional layer of security to the payment process.

Mr White said it also adds an extra layer of reassurance – giving people the confidence to shop safely online.

“For consumers, this guarantees the security of their payments, guaranteeing them an exceptional shopping experience.

“And, for businesses, having the right payment technology in place for SCA means their online sales will be more secure,” he said.

Visa data shows that when EMV 3D Secure has been applied, e-commerce fraud can be cut in half.

“Ultimately, keeping online sales as safe as possible could positively impact a company’s bottom line, so being ready for SCA should be a business imperative,” he said.

With more people shopping online than ever before, Mr. White said SCA is even more important.

“At Visa, we saw an almost 40% increase in online transactions in December 2020 compared to the previous year, so this settlement is very timely,” he said.

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