E-COMMERCE AND ONLINE PAYMENTS: WHAT’S NEW IN 2021

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Fingerprint, one-time password and new rules: for the consumers interested in digital payments and online purchases, new measures will come into force and they will change, presumably without return, the history of e-commerce and online transactions. The new rules will introduce greater security requirements for payments and for the protection of the financial data of those who buy online, ensuring a certain authentication and reducing the risk of fraud. To quickly refer to the legal framework, from 2021 each online transaction in Europe will be subject to the so-called Strong Customer Authentication (SCA) measures, adopted under the European legislation on the subject (Directive 2015/2366 on payment services 2 – PSD 2, which represents a legal basis for integrated development concerning electronic payments within the EU).

NEW RULES, OBJECTIVES AND EXEMPTIONS FOR DIGITAL PAYMENTS

Although an initial contraction in transactions seems inevitable, as it always happens with every innovation and digital transformation processes that bring a more change-resistant share of consumers, Strong Customer Authentication (SCA) will require additional information from consumers, such as the need for biometric parameters, the most common of which is fingerprint, or the request of a numerical passwords which will be notified at the time of the payment.

The goal, however, is to minimise the number of payments that require additional steps at checkout. Therefore, not all online payments will have to go through SCA. Among the eligible types, for example, there are the payments to trusted beneficiaries and low-risk (with a maximum of 500 euros) or low-value payments (up to 30 euros), with a cumulative maximum of 100 euros or five consecutive transactions since the last verified payment. Authentication will not require usual payments such as subscriptions or constant transactions over time, for which value and beneficiary are usually fixed. In addition, you can tell your credit institution if a customer’s payment is exempt, making sure it goes directly to the bank’s approval.

E-COMMERCE, CYBERCRIME AND SECURITY

Two-factor authentication is mainly based on the need to prevent fraud in the field of e-commerce. If we wanted to mention, for example, the cybercrime aimed at the illicit collection of personal codes and sensitive data, or the violation of banking systems of individuals and companies, we should consider that in 2019 there were almost 5000 cases registered in Italy by the Postal and Communications Police and those numbers increased exponentially in 2020 with the boom of online fraud during the lockdown.

Once the protocol is in place, consumers and businesses will thus be able to benefit from greater protection against infringements and abuses. This will progressively generate confidence in the e-commerce sector in general compared to online channels dedicated to the purchases of goods and services.

An opportunity that could prove decisive, since it is because the lack of trust of the user that, to date, only a third of users do not abandon the cart at checkout. In general, SCA could therefore represent for the e-commerce sector and, consequently, for web agencies, among the intriguing challenges of 2021, an opportunity to reduce losses related to fraudulent transactions, control operating costs and increase customer loyalty.

BOOM E-COMMERCE: INNOVATE TO COMPETE

The huge margins of digital transformation in the field of e-commerce will therefore have to be considered taking into account this historical step. The new provisions on digital payments, in fact, enter the scenario of a booming market, which has seen an increase in volumes of more than 20% compared to 2019, obviously thanks to the restrictive measures related to the Covid-19 emergency. If SMEs therefore have to take a few steps to allow their customers to continue buying online, once the legislation has come into force, banks and merchants will also necessarily have to get used to the news, by using telephone tokens or hardware for authentication, fingerprint or facial recognition.

Comfort, speed, transparency and security, however, make e-commerce one of the greatest levers of change and opportunities of this time of great digital transformation that, in order to be undertaken in the best way, must be addressed alongside with the professionals in the sector.

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