Ecommerce Europe wants risk-based approach to electronic payments authentication

Ecommerce Europe is concerned that the proposed one-size-fits-all approach to authentication undertaken by the European Banking Authority won’t help the ongoing fight against online fraud. The European ecommerce association thinks it will only damage the European ecommerce sector and opts for a risk-based approach.

That’s why Ecommerce Europe calls on European legislators to apply pressure for a risk-based approach to electronic payments authentication. The European Banking Authority previously wrote a consultation paper about how it wants to reduce the risk of fraud. One of the proposals is to make consumers re-enter their password for online transactions above 10 euros. The European Banking Authority wants stronger customer authentication, but according to Ecommerce Europe it’s better to facilitate and stimulate innovative methods of electronic payments authentication rather than focus on only one method.

‘They put at risk the future of European ecommerce’

The ecommerce association opts for dynamic authentication methods, such as risk management and targeted customer authentication methods. “These have been proven to provide an equal level of security and payment fraud protection while preserving business models of online merchants”, the organization says. The way it’s now proposed, could have a “damaging impact on investment and the future competitiveness of the European ecommerce sector”, Ecommerce Europe claims. “If not changed appropriately, they put at risk the future of European ecommerce.”

‘One-size-fits-all approach will increase shopping cart abandonments’

“The unique selling point of ecommerce lies in its ability to provide the consumer with fast, convenient and safe methods to shop for any goods and/or services which would usually not be available to them”, Marlene ten Ham, Secretary General of Ecommerce Europe, states. “As proposed, the one-size-fits-all approach to Strong Customer Authentication for all transactions above a €10 threshold threatens the intricate balance in checkout convenience, leading to a more cumbersome authentication process and an increase in shopping cart abandonments.”

Ecommerce Europe thinks Strong Customer Authentication is more static than risk-based approaches and that it fails to adapt to new and evolving parameters and fraud patterns. A good alternative would be Targeted Authentication for example, which “requires a level of customer intervention that is relevant to the risk associated with each individual transaction”.