Awkward online payments – are about to get more awful!

A British source estimated that Britons spend an average of 24 hours a week online or online shopping. And as more and more of our high-street stores, including iconic flagships like House of Fraser, go into administration we can blame increased online recreation and a shift in consumer behaviour.

This preference for online retail is often attributed to millennials, but even the older generation are now ordering from their favourite stores from the comfort of their own home. My dad buys dog food, wine, camera accessories and cycle clothing online. And who can blame him? Why wouldn’t consumers shop from online stores such as Waitrose & Partner’s when they’re boasting ‘£30 off your first shop online’?

But with online shopping comes online transactions and this makes consumers vulnerable to cyber risk. Although cyber security is nowadays widely recognised, fraudulent activity on the internet is more and more common. It’s the modern day version of a bank robbery. Why walk into a bank with a gun to get large amounts of money, when you can raid peoples bank accounts online or simply use their credit card without their consent?

Four or five years ago I was subject to this. Not long after setting up a new bank account, I received a phone call from my bank provider’s fraud department to question a suspect online payment. Justifiably horrified (as I hadn’t made the payment), I was extremely stressed and although it was a minimal sum (less than £30 in fact), I was shocked that someone could so easily obtain my card details and commit a fraudulent transaction without my knowledge.

Recently a fake scam letter supposedly from Barclaycard circulated social media and, although many people have poked fun at the spelling errors and ridiculous content, similar letters often enter email inboxes on a daily basis. And they are evidently successful, otherwise fraudsters would not continue to use them.

Good news – An authentication process called Strong Customer Authentication (SCA), governed by EU regulations, is in place to mitigate risk with online payments, At present, ecommerce card transactions are verified using an SCA tool called 3D Secure 1.0 which enables consumers to enter their card number and CVC verification.

As of the 14^th September 2019, new EU rules for online transactions mean that a new specification, namely 3D Secure 2.0, will be introduced. This will involve two steps of authentication, one of which will require consumers to enter a password received via SMS.

Seemingly great news for online shoppers – alas, there are numerous concerns for the reliability on having a stable mobile signal or access to wifi, without which the transaction cannot go through. Some are saying that approximately 1/3 of transactions will fail to go through. 

Not only that but, the British Retail Consortium estimates 75% of retailers are unaware this is coming into effect; that means that three in four retailers are unprepared for these changes. So seeing as your next online transaction may not go through – anyone fancy a trip to the shops?