Shoppers face tighter anti-fraud checks for online purchases from today as new verification rules finally come into force.
But the improved security risks mean you could risk your payment being declined if your bank is unable to contact you to confirm your identity.
So-called Strong Customer Authentication (SCA) rules came into effect from March 14, with the aim of providing a greater layer of security to stop fraudsters spending your money.
Essentially the new measures means more checks, such as a text or call to your mobile, will be required for certain online payments.
UK Finance, which represents the banking industry, says SCA will be activated for almost all online purchases above £25.
Multiple low-value payments could also prompt a request for verification.
Exemptions for when the extra security won’t be needed include non-electronic payments such as cheques, direct debit payments, and mail and telephone orders.
For regular payments, such as Netflix subscriptions, SCA won’t be required every time but may be required the first time the payment is set up.
Customers may also be able to add sellers to a “trusted beneficiary” list in future, meaning they won’t need to go through SCA when buying from that organisation.
Has your payment been declined? Let us know: mirror.money.saving@mirror.co.uk
However, many providers, such as Royal Bank of Scotland, NatWest, Santander and Nationwide, have said they will not be offering this.
Each bank will also have a different definition of what counts as a "risky" transaction - so not all lenders will run the same checks for the same purchases.
The new rules mean it is important for customers to keep their contact details up to date with their bank, so they have a means to contact you if you need to verify a payment.
In the worst case scenario, you could risk having payments declined or blocked if your bank can't carry out its checks.
Martin Lewis last year urged Brits to check their contact details with their bank before the fraud protections come in.
Customers who don’t have a smartphone will be offered other ways of verifying their purchase. For example, most banks will offer the option of email or an automated message to your landline.
It comes after consumer group Which? warned that those without a mobile phone, or a signal at home, risk having payments declined if they can’t verify their online spend.
A new warning from e-commerce firm Adyen today predicted just 44% of businesses are prepared for the new SCA rules.
Colin Neil, managing director at Adyen UK, said: “This creates a major hurdle for those businesses. Not only do they risk falling foul of regulators, they may also find their customer experience suffers.
“One of the concerns brands had about this legislation was that the additional authentication process would harm their conversion rates.
“While this concern was not without base originally, technology has come a long way since the existing proposal. SCA can now be provided without any additional friction to the customer experience.
“SCA may seem like an inconvenience in the short term, but in the longer term it will be a vital tool for businesses to manage risk and reduce fraudulent transactions."
You may have noticed the extra security checks already, as some card issuers began implementing SCA checks from January 18 in preparation for the full rollout.
The rules, which have been introduced by the Financial Conduct Authority (FCA), were supposed to come into force from September 2021 but were delayed due to the Covid pandemic.
Mastercard says it expects about 25% of online transactions to require some form of extra verification - up from only 1% of online purchases that currently require a password or some form of ID.
Jana Mackintosh, the managing director of payments at UK Finance, which represents the banking industry, says: “Fraud is a growing problem, with criminals stealing more than £750million in the first half of 2021 alone.
“That is why it is more important than ever that additional protections like SCA are put in place.
“For retailers, implementing SCA will provide customers peace of mind that payment processes are more secure.”
It is important to remain vigilant when it comes to receiving phone calls from someone who you believe is your bank.
Always be wary of calls you weren't expecting and remember, your bank will never ask you for your PIN number or full password - even as part of the new SCA rules.
