TheRetailer_Summer_19

BRC secures more time for online retailers to prepare for new rules NEWS FROM THE BRC

Andrew Cregan Head of Payment Policy British Retail Consortium

New payment rules due to be enforced from September will be postponed following months of campaigning from the BRC warning of widespread disruption to online retail. New Strong Customer Authentication (SCA) rules coming in as part of the second Payment Service Directive (PSD2), and meant to apply from 14th September, have been designed to tackle payment fraud by introducing “two-factor authentication” – that is two of: • Something you have (possession, e.g. a card or your mobile phone with a passcode) • Something you know (knowledge, e.g. pin number or password) • Something you are (inherence, e.g. fingerprint or face recognition) Although most in shop purchases will be unaffected, online purchases face severe disruption due to a lack of readiness throughout the payments ecosystem. Banks are yet to deploy solutions, most consumers are unaware of the new rules, and recent research suggested that more than 75% of retailers are unaware of changes required of them. In the worst case scenario for the consumer, SCA would mean that customers may not be able to buy things online with certain merchants.

The BRC have led cross-industry calls to delay introduction of new SCA rules, warning that implementation on 14th September would lead to a failure of 25-30% of e-commerce transactions. Following these collective efforts, the UK’s Financial Conduct Authority (FCA) announced on June 28th that it will postpone implementation and work with us on a blueprint and timetable for delivery. This followed an announcement of the European Banking Authority (EBA) to “provide limited additional time” to avoid unintended negative consequences. The BRC have proposed a delay in implementation until 2021 to raise awareness of the new rules among retailers and customers, and ensure readiness among banks, customers and shops. We will now work with the FCA and other industry bodies UK to confirm a new date for implementation, agree a plan and deliver a good state of readiness across the UK. The BRC welcome and strongly encourage the participation of our members in the workstreams that will now follow as part of the cross-industry preparations for SCA to ensure solutions work for retailers and customers alike. If you would like more information, please contact Andrew Cregan Andrew.Cregan@brc.org.uk

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