Visa Argues Against Passwords to Protect Electronic Payments in the EU.
With the rise in cybercrime and online fraud incidents, the European Banking Authority came with a proposal to protect electronic payments in August, laying down draft technical standards for the prevention of illegal activities. This includes forcing the use of passwords to validate payments online. However, arguing against it, Visa states that the EU’s proposal to force the use of passwords or codes for the authentication of digital payments above $10.60 could raise the risk of disrupting online shopping, without increasing security. Although this does not apply to the US market, it may be a sign of things to come.
Proposal Does Not Reduce Risk.
Visa argues that the new proposal to protect electronic payments poses a serious threat to online shopping, without reducing the risk of online fraudulent activities.
- The world’s largest payments network operator warns that online business may fall in Europe with the adoption of the proposed rules.
- Visa argues that the new rules may pose a serious threat to eCommerce, discouraging consumers from purchasing online due to the increased technical hurdles.
- Additionally, there is a risk of blockage of online trade outside the EU, as payments worth more than 6 billion euros to vendors outside of the EU may be declined by network operators. Most foreign sites may not apply the proposed security standards laid down by EU.
According to a survey report conducted by Visa, a majority of European consumers make online purchases from retailers outside of the EU. As per the new proposal, payments of more than 10 euros would also require verification codes, despite being done with apps, such as Uber or on websites requiring consumers to register payment cards. This will go against consumer convenience and affect online sales.
At present, authentication is required only for those payment services where a shopper buys from suspicious vendors or locations.
What’s the Future?
The banking authority is considering adoption of a final proposal early next year. However, the proposed technical standards must get approval of the European Commission. European lawmakers will be responsible for making the final decision on the new proposal to protect electronic payments.
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