Extra Identity Checks For UK Online Shoppers

New regulations to crack down on fraud in the UK have taken effect in March. As a result, it is causing a lot of chaos among online shoppers in the country. They now have to face stricter identification checks before making purchases online.

Online fraud is a major issue in the UK. It results in shoppers being scammed out of £380 million annually. Therefore, customers will now need to face more identity checks when making purchases online that cost more than £25.

Want to know more about the new regulations? Continue reading…

What are the new guidelines?

The new Strong Customer Authentication (SCA) rules will alter how consumers verify their identity while buying something online. This will need UK online shoppers to go through stricter checks, especially when making purchases with their debit or credit cards.

The restrictions are comparable to those that users of internet banking already experience.

When completing a purchase, customers will need to validate two of three “factors”. For example, they’ll have to confirm something they are, like a fingerprint or face ID. Otherwise, it can be something they know, like a passcode or password; or something they have, like a mobile phone.

Due to the two-factor authentication checks, shoppers may need to submit a one-time password they received via text message to verify a purchase. Alternatively, they can answer a landline or cell call from an automated system. Moreover, other confirmation methods include logging onto a banking app.

Do online shoppers have to verify their identity on every transaction?

No! There are certain types of transactions that have exemptions. Most notably those regarded to be at “low risk” of fraud are excluded from the rules. For example, when purchasing inexpensive things or recurrent purchases like subscriptions. On the other hand, the extra security checks are likely to be on high-value purchases. Likewise, you’ll have to validate your identity on those purchases that are out of the buyer’s regular spending range or are made on a device that hasn’t been used in a while.

Mastercard anticipates that over 25% of online transactions will need some more customer authentication. Meanwhile, only 1% of the buyers needed to do so before the new rules came into effect.

What are the effects of this new guideline?

It is a great initiative to save online shoppers from online scams. However, we can also notice an increased number of declined card payments due to the new rules. It’ll lessen the £376 million wasted on online fraud in 2020. No doubt it’s the most significant reform to card payments since the implementation of chip and pin 16 years ago. On the other hand, those who aren’t tech-savvy are going to have it difficult for them to shop online.

We’ve noticed that certain card issuers started rejecting some non-compliant transactions around mid-January. It was a part of the “ramp-up” to the full deployment of SCA.

According to research by Barclaycard, more than 1.2 million online transactions totaling more than £100 million were denied in February. As a result, merchants lost sales. A little over 14% of customers saw an increase in online payment rejections. Moreover, 37% went to another store to make their transaction.

How can you ensure a successful payment process?

According to a representative for the banking and financial industry organization, UK Finance, SCA “is a crucial weapon in the battle against fraud. It gives an additional layer of protection when individuals pay online using a card.

To ensure a successful payment process, customers should confirm that their bank has their current contact information. They can get in touch with their bank to find out what help they offer if they have any special needs.

According to the British Retail Consortium, retailers have been preparing their systems for the additional security checks for many months.

Moreover, the BRC and its members have worked with suppliers to ensure that various fraud checks are undertaken behind the scenes. Moreover, they make sure that any additional friction is kept to a minimum according to Tom Ironside, head of business and regulation at the BRC. And thus, customers should know that internet shopping is now safer than ever.