Published by Gbaf News
Posted on November 23, 2016
8 min readLast updated: January 22, 2026
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Visa has warned that new European rules on e-commerce threaten to seriously disrupt online shopping and cause inconvenience for consumers.
The European Banking Authority (EBA) has brought forward proposals for how it will implement what is called strong customer authentication (SCA). The plans include a “one size fits all” approach where every online transaction over €10 will require additional steps at checkout such as entering passwords, codes or using a card reader.
Independent consumer research carried out in five European countries[1] on behalf of Visa, highlighted that 95% of European consumers spend over €10 when shopping online, meaning that these measures would affect millions of shoppers.
These steps would be felt most strongly in the UK, however, as UK consumers are the most prolific online shoppers of those markets surveyed – 63% regularly shop online, compared with the European average of 51%.
For UK online shoppers, the changes are likely to lead to more frustration and more cart abandonment. In fact, the survey found that over half (52%) of consumers would abandon purchases if more steps were added to the checkout.
In practical terms, the proposals would mean:
Across Europe, the changes will potentially impact approximately €6bn of transactions, according to Visa’s data.
Peter Bayley, Chief Risk Officer, Europe at Visa, said: “These new proposals threaten to seriously disrupt the way we all shop. 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.
“Managing payments is always about balancing security and convenience. If you tip the balance too far one way, you end up making it either too difficult or too risky for consumers to make purchases wherever, whenever and on whatever device they want. Either way it annoys consumers and damages businesses’ potential to sell their goods and services.
“E-commerce has been a European success story in a time of weak overall economic growth but this initiative threatens to slow that growth and reduce the competitiveness of European businesses against competitors from other parts of the globe.”
The EBA will publish its final proposed standards on 12 January 2017. These standards are in response to the requirements of the Payment Services Directive (PSD2) which mandates SCA for all electronic payments.
Peter Bayley added: “All of this inconvenience comes with no evidence that it will actually reduce fraud. We have a system today that works, what we call risk-based authentication. This enables intelligent decisions about whether a particular purchase is low risk taking into account things like the device that’s being used and previous shopping patterns.
“Fraud on Visa cards today is low, tracking at less than 5 cents in every €100 spent. And consumers are protected from fraud losses anyway – all the risk is taken by the merchants and banks. They are prepared to accept that risk to give a seamless experience to their customers as they know this makes sales more likely and it’s what people now expect.”
For more information on Visa’s response to the EBA, visit https://www.visaeurope.com/about-us/policy-and-regulation/
[1]Populus interviewed 5,136 adults 18+ in the UK (1,096), France (1,011),Germany (1,004), Italy (1,016) and Spain (1,009) online between 2nd and 7th November 2016
Visa has warned that new European rules on e-commerce threaten to seriously disrupt online shopping and cause inconvenience for consumers.
The European Banking Authority (EBA) has brought forward proposals for how it will implement what is called strong customer authentication (SCA). The plans include a “one size fits all” approach where every online transaction over €10 will require additional steps at checkout such as entering passwords, codes or using a card reader.
Independent consumer research carried out in five European countries[1] on behalf of Visa, highlighted that 95% of European consumers spend over €10 when shopping online, meaning that these measures would affect millions of shoppers.
These steps would be felt most strongly in the UK, however, as UK consumers are the most prolific online shoppers of those markets surveyed – 63% regularly shop online, compared with the European average of 51%.
For UK online shoppers, the changes are likely to lead to more frustration and more cart abandonment. In fact, the survey found that over half (52%) of consumers would abandon purchases if more steps were added to the checkout.
In practical terms, the proposals would mean:
Across Europe, the changes will potentially impact approximately €6bn of transactions, according to Visa’s data.
Peter Bayley, Chief Risk Officer, Europe at Visa, said: “These new proposals threaten to seriously disrupt the way we all shop. 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.
“Managing payments is always about balancing security and convenience. If you tip the balance too far one way, you end up making it either too difficult or too risky for consumers to make purchases wherever, whenever and on whatever device they want. Either way it annoys consumers and damages businesses’ potential to sell their goods and services.
“E-commerce has been a European success story in a time of weak overall economic growth but this initiative threatens to slow that growth and reduce the competitiveness of European businesses against competitors from other parts of the globe.”
The EBA will publish its final proposed standards on 12 January 2017. These standards are in response to the requirements of the Payment Services Directive (PSD2) which mandates SCA for all electronic payments.
Peter Bayley added: “All of this inconvenience comes with no evidence that it will actually reduce fraud. We have a system today that works, what we call risk-based authentication. This enables intelligent decisions about whether a particular purchase is low risk taking into account things like the device that’s being used and previous shopping patterns.
“Fraud on Visa cards today is low, tracking at less than 5 cents in every €100 spent. And consumers are protected from fraud losses anyway – all the risk is taken by the merchants and banks. They are prepared to accept that risk to give a seamless experience to their customers as they know this makes sales more likely and it’s what people now expect.”
For more information on Visa’s response to the EBA, visit https://www.visaeurope.com/about-us/policy-and-regulation/
[1]Populus interviewed 5,136 adults 18+ in the UK (1,096), France (1,011),Germany (1,004), Italy (1,016) and Spain (1,009) online between 2nd and 7th November 2016
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