‘Targeted Authentication’ best answer for secure and convenient online payments


Ecommerce Europe, EDiMA, EPIF, Choice in eCommerce and CCIA support study warning about the negative impact from the blanket imposition of ‘Strong Consumer Authentication’ on online payments.  

Four leading European digital, e-commerce and payment associations endorse a new independent study by consultancy Clever Advice as the European Banking Authority (EBA) prepares its technical standards on Strong Consumer Authentication. The study underlines that Targeted Authentication – which requires customer intervention in the authentication process relevant to the risks associated with each transaction – is a better alternative than Strong Customer Authentication. We believe this is too restrictive and burdensome.

Marlene ten Ham, Secretary-General of Ecommerce Europe states: “Targeted Authentication is the only viable method to secure a safe and seamless shopping experience for consumers. Targeted Authentication has proven to offer fraud prevention levels matching those of traditional strong techniques without hindering the customer experience, as the study shows. Today, 25% of shopping cart abandonments results from cumbersome authentication processes. This has a crucial negative impact on online merchants. However, there is evidence that in some verified cases Targeted Authentication could increase conversion rates significantly by up to 70%.

Targeted Authentication ensures both a high level of online security and a smooth transaction process for the benefit of European consumers, online merchants and the wider economy. We urge the European Banking Authority to reflect the need for both a risk-based and a technologically neutral approach by allowing Targeted Authentication in their Regulatory Technical Standard (RTS). The draft RTS is open for stakeholder comments until 12 October 2016.

Targeted Authentication safeguards smooth shopping experience

To stimulate the success of the European e-commerce industry, an efficient and well-functioning payment landscape encouraging a cross-border Digital Single Market is crucial. The sector calls on the EBA and the European Commission to allow solutions that ensure a smooth and easy secure payment experience for customers. If the final EBA standards mandate Strong Customer Authentication for all online payment transactions regardless of the risk involved, it will create a complicated process, a negative customer experience and more abandoned transactions. This would be damaging for European customers and businesses, and will hamper the development of e-commerce.

Derrick Brown, Chair of EPIF states: “EPIF supports initiatives that introduces more choice and innovation in the European payments sector. We need to constantly adapt to changing customer needs and the rapid pace of change in the market. The strong authentication requirements should carefully balance security and user friendliness.”

James Waterworth, Vice President of CCIA Europe states: “Targeted Authentication clearly delivers strong security and thus confidence on online retail. To handicap ecommerce, a notable European success story, by mandating the wrong security standard would be an own goal damaging small players more than global giants, reducing consumer choice and impeding the development of cross-border commerce.”

For the full study, please see this link.

For EBA’s consultation on the draft RTS, please see this link.

Notes to editors

Ecommerce Europe is the association representing 25,000+ companies selling goods and/or services online to consumers in Europe. Its mission is to stimulate cross-border e-commerce through lobbying for better or desired policy, tabling the e-commerce sectors’ demands on the agenda of those designing the necessary standards and regulations.

EDiMA is the European trade association representing online platforms. It is an alliance of new media and internet companies whose members include Allegro, Amazon EU, Apple, eBay, Expedia, Facebook, Google, LinkedIn, Microsoft, Nokia, Netflix, Twitter, Linked-In and Yahoo! Europe.

EPIF is the European trade association representing the interests of more than 200 authorized Payment Institutions at the European level. EPIF brings together European and international companies covering a wide range of business models regulated by the Payment Services Directive (PSD).

Choice in eCommerce is an eCommerce sellers’ initiative founded by online merchants in 2013. It has created a petition with the objective of ensuring that all online sellers, particularly SMEs, can benefit from a political and legal situation where sales bans on online platforms are not tolerated.

Computer and Communications Industry Association (CCIA) is a non-profit membership organization for a wide range of companies in the computer, Internet, information technology, and telecommunications industries, represented by their senior executives.