Global payment giant Visa has warned that the proposed European strong customer authentication (SCA) rules on e-commerce will threaten to disrupt online shopping while causing inconvenience to consumers.
Lambasting at European Banking Authority’s (EBA’s) ‘one size fits all’ approach to tighten the authentication rules for online transactions over €10, Visa cautioned that the new rule will lead to more declined transactions, complicated checkouts and abandoned purchases.
As per the proposed rules, every online transaction worth €10 will have to go through additional steps at checkout such as entering passwords, codes or using a card reader.
The payment processor further pointed out that 61% of European consumers said that increased checkout steps will cause them to abandon purchases. Visa believes that half of all European consumer e-commerce would be impacted as the result of the new rules.
Visa estimates that the half of all today's e-commerce sales would be impacted in Europe; and transactions worth more than €6bn would be affected outside Europe.
Visa further said that the new rule will kill express online checkouts, which includes one-click checkouts even at online retailers where consumers shop regularly, and no more fast, automatic in-app payments where cards are already stored.
It will decrease access to online shopping outside Europe, as international websites will have to adhere to the new European rules or purchases will be automatically declined.
Furthermore, the new rules will create longer queues and issues using cards at places like toll booths and parking where PINs are not required today.
Visa chief risk officer for Europe Peter Bayley said: “These new proposals threaten to seriously disrupt the way we all shop online.
“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.
“We completely support strong security measures. However, managing payments is always about balancing security with convenience. The planned one size fits all approach tips the balance too far one way, making it difficult for consumers to make purchases wherever, whenever and on whatever device they want. It will annoy consumers and damage businesses’ potential to sell their goods and services."