Visa Criticizes European Move toward Stronger Online Authentication
A European plan for new online transaction authentications has come under fire from Visa, which says the proposal will make online checkout needlessly complicated for consumers.
The European Banking Authority in January is set to release its online transaction rules in response to the revised Payment Services Directive, which calls for “strong customer authentication” for online payments. The authority wants to tighten authentication for online transactions of 10 euros (US$10.60) or more. The rules would apply to domestic e-commerce operations and foreign Websites selling to European consumers.
According to Visa, that will mean the end in Europe of one-click checkouts that Amazon and other online retailers have implemented, and quick payments via mobile apps that store payment card data. In a Visa survey, half of U.K. consumers said they wouldn’t follow through on online purchases if more steps were added to checkout.
“These new proposals threaten to seriously disrupt the way we all shop,” said Peter Bayley, Visa’s chief risk officer for Europe. “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.”
The revised Payment Services Directive, or PSD2, aims to contribute to a more integrated and efficient European payments market, level the playing field for payment service providers (including new players), make payments safer and more secure, protect consumers and encourage lower prices for payments, according to the European Commission.