Consumers have been urged to prepare for new security measures aimed at clamping down on online banking fraud.
Under the EU Payment Services Directive, consumers will face a new two-step verification process. The directive, known as PSD2, will go live on September 14, and the Banking and Payment Federation Ireland (BPFI) has called on consumers to be aware of what’s coming and to prepare accordingly.
The new security measures, known as strong customer authentication (SCA), will see changes apply to how end users experience logging onto their mobile banking.
Irish credit institutions have in recent months been contacting their customers with a view to alerting them to the coming changes, primarily via messages in their mobile and online banking views.
In the majority of cases being prepared involves clarifying your mobile phone number with the institution in question. Failure to do so could see access to mobile portals suspended from the September date.
Gill Murphy, the head of payment schemes with the BPFI, described it as “vital” that customers “carefully read the information provided by their bank in relation to PSD2”.
“This information will outline what changes customers can expect as well as any actions that they may need to take in order to ensure continued access to their online accounts without interruption,” said Ms Murphy.
PSD2 is also set to introduce open banking, a measure designed to allow payments direct from bank accounts for online services via a third party provider as an alternative to using a credit or debit card while shopping on the internet.
Open banking will also allow for consumers to access a single view of their account information across multiple institutions.
BPFI, for its part, has been conducting a number of awareness drives, involving radio advertising and social media campaigns, in recent times in order to appraise businesses and individual consumers of what will be expected of them from mid-September.
A report commissioned earlier this summer by online payments company Stripe stressed that Europe’s online economy risks losing as much as €57bn as a fallout from just one in two businesses expected to be compliant with the new SCA regime when it comes onstream.
The new authentication framework is expected to disproportionately impact small businesses, with three in five companies with under 100 employees either not planning on being compliant, unfamiliar with what’s expected, or unsure when they will be ready.
“SCA is unequivocally the single most disruptive event to impact European digital commerce, and many businesses have yet to fully grasp its extensive impact,” said Jordan McKee, an analyst with 451 Research, at the time of the report’s launch in early June.