The final Regulatory Technical Standards (RTS) on Strong Customer Authentication, submitted to the European Parliament and Council today, fails to take into account the continued concerns of the European e-commerce industry. However, we recognize that the Commission maintained the Transaction Risk Analysis (TRA). Merchants have unique information about their customers which allows them to detect early potential fraud, while offering customers a frictionless checkout.
Ecommerce Europe fully endorses the European Commission’s underlying objectives of creating an innovative and competitive online payments market based on the highest levels of customer confidence and checkout security. Convenient and safe online payments are the bedrock of a successful and competitive digital economy.
“Ecommerce Europe regrets that the European Commission has not made the substantial changes to the proposed exemptions to when a customer has to undergo Strong Customer Authentication as repeatedly advocated for by the industry”, said Margreet Lommerts, Ecommerce Europe Secretary General ad interim, adding that “if a customer buys six songs or apps worth 0.99€ each, the RTS would mandate the sixth transaction, worth less than 1€ to undergo SCA. These restrictions are not reasonable in an online environment.”
Ecommerce Europe, however, calls on European regulators to provide all parties in the payments value-chain, including online merchants, with further clarifications and clear guidelines on the real-life applications of their proposed exemptions on trusted beneficiaries, recurring payments and low-value transactions. Online merchants, in particular, question the RTS’ mandated proportionality regime for low-value transactions.
Ecommerce Europe is convinced that the clarifications regarding online merchants’ continued ability to apply transaction risk analysis, based on individual merchants’ fraud risks, rather than on a portfolio basis will result in a strong incentive for merchants to continue investing in innovative fraud prevention solutions and to work together with their Payment Service Providers to keep lowering fraud in online payments.
“We welcome the clarifications by the Commission that online merchants may continue to apply technologically advanced risk-assessments, we call on the European Commission to further clarify and allow industry players to work together flexibly towards a feasible market application of its proposed exemptions,” declared Roberto Liscia, Chair of the Ecommerce Europe e-Payments Working Committee.
The RTS are complex and raise a number of questions concerning their application. Ecommerce Europe, therefore, welcomes and supports the Commission’s plan to encourage the European Banking Authority (EBA) to establish a dialogue with all players in the payments value chain to bring further clarity on the application of the RTS and reassure all market participants. Clear guidance by the Commission and the EBA to stakeholders is crucial to ensure that online merchants can prepare in due time for compliance with the legislation.