Strong-Customer-Authentication (SCA) rules to be implemented – 14th March
Over the coming weeks online shoppers in the UK can expect more identity checks and possibly more card-declined messages as retailers ready themselves for new anti-fraud rules that come into effect on 14th March. Buyers have already started seeing more requests to verify their ID as payments providers and retailers adopt the new ‘strong-customer-authentication’ (SCA) rules.
Under the changes, before a retailer can accept an electronic (online) payment it will have to verify that the customer is who they claim to be. The measures are similar to those already faced by people logging into online banking. While most low-value retail purchases will go ahead as before, with checks carried out in the background, shoppers buying more expensive items online will have to input a password, a pin or a one-time-passcode they have been sent via a text or landline, or log into their banking app and approve the purchase.
The rules, which have been introduced by the Financial-Conduct-Authority (FCA), were planned to come into force a year ago but were delayed to give retailers more time to adapt. The legislation came out of the European-Banking-Authority and was adopted into UK law before Brexit. It will apply to debit and credit card purchases and will have the biggest impact on those making what are deemed to be the ‘riskiest purchases’. The new rules do not apply if you buy something over the phone. High-value purchases, or those outside a buyer’s ‘normal spending habits’ or transacted on a previously unused device are most likely to prompt the extra security check.
Mastercard says it expects about 25% of online transactions to require some form of extra verification by the customer after 14th March. Until now, only 1% of online purchases triggered the need to input a password, or similar. Under the EU rules, payments under £25 are considered low value but there are exemptions that mean that not all spending above that level will prompt SCA. Similarly, multiple low-value payments could prompt a request for verification.
If you have already noticed it happening, it is because card issuers began declining some non-compliant transactions on 18th Jan as part of the ramp-up to SCA’s full implementation.
Fraud is a growing problem, with criminals stealing more than £750m in the first half of 2021 alone. This is why additional protections such as SCA are being implemented. Effecting SCA will provide customers peace of mind that payment processes are more secure.
Be ready for the changes by making sure your contact details are correct and up to date. If you bank online, you may be able to update your phone number and other details there. If not, speak to your bank or provider directly by visiting your branch or giving them a call. As always, remember to Take Five and stop to think. A genuine bank or organisation will never contact you out of the blue to ask for your PIN, full password or to move money to another account. Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by.
If you require any help or advice, please contact Valkyrie at E: firstname.lastname@example.org | T: +44 (0) 20 7499 9323.