Online fraud prevention: 2-factor authentication coming in September
Posted on 26th April 2019
Technology is almost ubiquitous. We all spend an increasing amount of time and money online and this is only going to increase. Cybersecurity it therefore going to become even more important. Yet I suspect I am not alone in being unaware that new online shopping rules are coming in September this year. To quote from an article in the Telegraph's Business Pages today, "From Sept 14 purchases worth more than £30 will require 'two-factor authentication,' such as a bank card and a password, or a mobile phone and a fingerprint. The aim is to make online transactions more secure on a par with the chip-and-PIN system in shops." The article goes on to say that the British Retail Consortium believes that "up to £60Bn of retail sales via cards online" could be lost as a result.
Despite the seemingly obvious benefits for the consumer, the Retail Business Consortium, the Federation of Small Businesses and the Institute of the Directors are all concerned that lots of businesses don't know about this and are unprepared for the change. They want the threshold to be £150, not £30, and to support this have made their claim that up to £60Bn of online card sales could be lost. This obviously worries the card companies too, with Visa's Mark Nelsen suggesting that it will be necessary for banks to allow customers to have several authentication options, ranging from a text option if there is a mobile signal or email if there is not, or alternatively use a biometric (i.e. fingerprint) system if their smartphone allows this. It should also be possible for a sale to go through if the retailer has a connection problem.
Clearly, there is work to be done to inform both retailers and their customers (e.g. me!) about these changes. However, the £60Bn figure for the potential loss to retailers seems to be scaremongering. I did a little checking and the government's own figures show that in 2017 the total amount spend online with retailers was actually less than £60Bn (see chart below). Yes, online retail sales have increased rapidly since then (growth to 18.2% of the total in Aug 2018 compared to 15.95 in 2017), but it does seem that the BRC may be over-egging things somewhat.
What is not up for debate though is that online fraud costs us all a lot of money. Consumer group Which estimated (May 2018) that online shopping fraud costs the British £58M a year. I am sure that some retailers will suffer if they are not prepared for the changes that are coming in September, but they have time to make sure they have the right systems in place. On balance, I'd say that the consumer would prefer it if they do.
Nikola Kelly, MD, Be-IT
Posted in News, Opinion
.. Back to Blog