Visa: EU’s plan for increased security on electronic payments will not work
Please excuse the rather meagre offering on Contactless Intelligence last week but with Trustech (formerly CARTES) about to kick off this week and Thanksgiving in the US, it was a rather scarce week for ‘real meaty’ news (you know, something you can get your teeth into). However, I did come across a tasty morsel (OK - enough with the food metaphors!). It’s this: The European Union’s planned rules to reduce fraud by forcing the use of passwords or codes to authenticate electronic payments above 10 euros ($10.60) risk disrupting online shopping and may not increase security, claims Visa.
As cybercrime and online fraud are on the rise, the European Banking Authority, the EU’s banking regulator, proposed in August draft technical standards to prevent illegal activities, including the passwords. “These new proposals threaten to seriously disrupt the way we all shop online,” Visa’s chief risk officer for Europe, Peter Bayley, said in a statement. “All of this inconvenience comes with no evidence that it will actually reduce fraud.” If the European Banking Authority had their way then payments of more 10 euros with apps that bring about in-app or online purchase would no longer be automatic, but will require verification codes.
Visa claim that payments to vendors outside the EU amounting to more than 6 billion euros are at risk of being declined by network operators because foreign websites, based in the United States or Japan, may not apply the EU’s new security standards. A survey conducted by Visa said that 51% of European consumers shop online from retailers outside the EU.
“The EBA had to make difficult trade-offs between various competing demands,” a spokeswoman for the regulator said. “These include the opposing objectives of achieving a high degree of security in retail payments against customer convenience.” The banking authority will adopt a final proposal at the beginning of next year and is considering whether to introduce changes to its draft text. Obviously, changes that Visa would like to see added.
After all, one only has to experience the intense pressure placed upon consumers in the run up to Christmas (including Black Friday and Cyber Monday) to realise how much easier it is becoming to shop online. The UK Cards Association is reporting rising numbers when it comes to spending in the UK. Their latest September figures show that card spending increased by £4.4 billion in the three months to the end of September compared to the previous quarter, a 2.8 per cent rise, with 103 million more purchases, with 22 per cent of card transactions being made using contactless cards in September, with internet purchases constituting a further 13 per cent of transactions. Richard Koch, head of policy at The UK Cards Association, commented, “We’re making over three million more card transactions every day compared to September last year, with contactless and online payments playing a significant role.”
If we are, as consumers, looking to spend more time purchasing online, then one must surely look to Amazon to see what the future will hold in the area of online purchasing. One word here - cryptocurrency. The giant Internet-based retailer offers its customers a new effective way to pay in bitcoin called Amazon Direct. Amazon Direct was developed by iPayYou.io, a Seattle-based company making Bitcoin a useful currency for the masses. A reliable and seamless wallet of iPayYou allows users to buy, sell, send, and receive bitcoin.
It is interesting that its CEO is Gene Kavner, a former worldwide director at Amazon. “Amazon Direct is the best way to spend bitcoin: after determining what you want on Amazon, you can ‘automagically’ transfer bitcoin from iPayYou to Amazon. Amazon Direct is revolutionizing the way consumers are able to spend their bitcoin by granting them access to buy more than 100 million products at the world’s largest store,” said Kavner. iPayYou.io made it possible for Amazon users to seamlessly transfer any dollar amount of bitcoin from existing bitcoin wallet on iPayYou to Amazon. Users can determine any amount of bitcoin they want to transfer on a new Amazon Direct tab.
Amazon Direct is very simple in operation – users only need to specify the destination account at Amazon.com. Afterwards, they will be able to exchange funds from Bitcoin on iPayYou to USD on Amazon in seconds. “During my time as an executive at Amazon, we closely studied the friction points and obstacles faced by shoppers, including and especially with payments. Bitcoin is a solution to so many of those problems,” added Kavner. “That’s why today – in time for the holiday season –we’re launching the most direct way to spend bitcoin anywhere, starting with the world’s largest retailer. We want bitcoin to be the everyday default currency. The only way for that to become a reality is to provide consumers with practical ways to spend their bitcoin — that is our grand mission, something the team at iPayYou is working tirelessly to achieve.”
My Mum has just got round to understanding contactless payments and online shopping - I am going to love having to explain what Bitcoin is to her. She’ll probably going to get it confused with a Terry’s Chocolate Orange. It’s Christmas, time to bring out the Bitcoin!
Steve Atkins
Contactless Intelligence
