New changes coming into effect will result in cards being rejected if someone can’t prove their identity. Retailers will carry out additional checks before people can buy items or withdraw money from their cards.
The changes will affect everyone who banks or makes purchases online, as they will be subject to additional security checks in an attempt to make transactions more secure.
Customers will now receive a code from their bank, usually to their mobile phone, when they make a payment online and must enter it at the checkout for the payment to be approved, reports ChronicleLive.
Alternatively, people can be asked to approve payments by logging into their bank’s mobile app.
Without the identification check to prove that the transaction is genuine, the card payment may be refused.
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The changes are coming under the Financial Conduct Authority’s (FCA) new fraud prevention rules, known as ‘Strong Customer Authentication (SCA).
The idea behind the move is to create a new layer of security to protect shoppers and their money, but some banks have already warned their customers that card payments could be declined as some retailers may not be ready for the move. March 14.
In late January, First Direct told current account holders: “As we get closer to the due date, the number of times you’ll notice being asked to verify that you’re the one making the payment will increase.
“‘If the retailer isn’t ready for the new process, there could be times where your card could be declined.”
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If people make regular payments for subscriptions to their card, like Netflix or Spotify, they won’t be required to enter a code every time the money leaves their account.
It is important for the bank to have all of someone’s contact details so that there are alternative ways to contact them, such as mobile and landline numbers and an email address.
Lloyds bank warned: “To help keep you and your accounts more secure from fraud when you use your debit or credit card to shop online, we’ll ask you more often to confirm that it’s really you making the payment.
“You may have already seen this happen when you shop online, and it will happen more often from now on.”
Some banks and retailers are already using the additional security check for customers spending a large sum of money or when using a website for the first time.
The new rules were supposed to be in place on September 14, 2019. But the deadline was extended 18 months and then pushed back again due to the pandemic.
The new SCA verification process is an extension of the rules that apply to online and mobile banking from March 14, 2020, so you may have already noticed certain actions that require identity confirmation, including starting log in and transfer money to someone else.
And SCA checks also apply if you make multiple contactless payments in a row totaling more than £300, when you’re asked to verify your identity by entering your PIN.
The new rules also apply to transactions made through PayPal and buy now and pay later firms, such as Klarna.
Many larger stores, including Amazon and Asda, say they have been preparing for the new rules for some time.
Mike Cherry, president of the Federation of Small Businesses, said: “In today’s turbulent economic conditions, small retailers already have a lot on their plate and may not have the bandwidth to handle this alone, especially if a small operation online retailer is a screw – in a mainly bricks and mortar business.”
Britons need to be vigilant when receiving text messages to make sure it’s not a scam.
Your bank or card company will never ask for your PIN, password, date of birth, address, or other personal information to verify a payment under this system, so if it asks for more than just a verification code, it’s probably a swindle.
Some scammers may use these new rules as an opportunity to try to get hold of your personal and financial information.