New online rules risk massive loss of business
Amadeus has warned new EU anti-fraud rules risk “massive loss of business” for online retailers despite the UK regulator’s decision to delay enforcement.
An EU requirement for Strong Customer Authentication (SCA) on e-commerce payments over £30 means card issuers could decline transactions without two-factor authentication from September 14.
Jean-Christophe Lacour, Amadeus head of merchant services, said: “We don’t know what the decline rate will be” but insisted the firm “would be ready as a GDS and payment provider” despite confusion about how regulators will enforce the rules across Europe.
SCA marks the final phase of EU Payment Services Directive 2 (PSD2) and aims to cut online payment fraud, which is up to six times the rate of offline card fraud, despite banks and retailers already using 3D Secure authentication online. It applies to card issuers and acquirers, which process card payments, and means secondary authentication of payments before sales goes through.
Lacour said: “From September, a [card] issuer could decline any transaction [over £30] without two factor authentication. This could have a serious impact on conversion rates for a business that does not do a lot of authentication [now].”