Concerns Raised over Inconvenience of Stricter Online Payment Regulations
19 September 2019 - 14:47 by David Aiken
A study from Forter has found that 49 per cent of Brits could be put off from making a purchase via safe shopping online in the wake of the rollout of the Second Payment Services Directive, which is due to be implemented in 2021 in the UK.
Other EU member states have already started rolling out this regulatory overhaul, which is designed to protect digital payments from fraud and ID theft, although a delay implemented by the Financial Services Authority means that British retailers are not yet required to comply.
The main aspect of the updated regulations is the addition of a requirement for multi-factor authentication to be used whenever a payment it made. This will generally be handled by sending out a code in an SMS which customers will need to enter at checkout to confirm that the transaction is legitimate.
While this will boost security, researchers have found that the added inconvenience of multi-factor authentication of this kind is likely to dissuade at least half of people from making certain purchases, which is obviously bad news for online retailers.
Respondents to the report were asked about the types of authentication which would be most likely to cause them to abandon their online cart, with 60 per cent saying that facial recognition technology would be their least desired security measure to encounter. Fingerprint scanning was only marginally less loathed, while the most appealing option was indeed the proposed SMS code, even if 44 per cent still saw this as an insurmountable hurdle.
Ultimately, this report reveals that the majority of people in the UK are unwilling to embrace the age of biometric authentication when making payments. This likely has a lot to do with privacy concerns and is something that both retailers and regulators will need to address.