Paying for goods and services online in France will become more secure as new EU security standards take effect.
The rollout of new rules for online payments greater than €30 will be gradually adopted by retailers and service providers in an effort to combat fraud. It will replace the current SMS authentication code system.
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Under the EU's PSD2 payment services directive, banks, payment operators, and online merchants are required to deploy a so-called “strong customer authentication” system for electronic payments or sensitive banking transactions.
Since Saturday, May 15, “strong authentication [has been] requested by French banks, in consultation with the payments ecosystem, for online purchases,” said the French Banking Federation in a statement.
To make card payments online, buyers must prove they are authorised to make payments on the Internet using it.
This will mean two out of three security measures will be required to make online payments using an app on a recognised smartphone.
Customers will receive an authentication notice, either by entering a unique personal identification code into a bank app, or by biometric fingerprint - such as a fingerprint, facial recognition or iris recognition - for suitably equipped mobiles.
“For customers who do not have a smartphone, banks offer alternative solutions such as the use of a one-time SMS coupled with a password known by the customer, or the use of a dedicated physical device,” the banking federation said.
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In total, more than 80% of the amounts are already subject to strong authentication. It has been in place for payments greater than €500 since February 15, €250 since March 15 and transactions above €100 since April 15.
The system may be waived for some low-cost payments, for example on transactions of less than €30, such as regular payments for subscriptions or addressed to a beneficiary pre-authorised by the consumer.
Online shopping has exploded during the Covid-19 pandemic, but the fraud rate in e-commerce is 20 times higher than in-person shopping.
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