City watchdog delays new online payments rules after industry appeals for more time
The financial regulator has agreed to delay new rules on online payments for 18 months after industry bodies called for more time to adapt to the changes.
The new rules, known as strong customer authentication (SCA), will create an additional layer of verification for online payments to help reduce fraud.
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The measures will come into effect on 14 September, but the Financial Conduct Authority (FCA) today said businesses will be granted a grace period until March 2021.
The delay came after industry groups warned that card issuers, payments firms and online retailers would not have time to implement the changes and that customers could be affected.
Eric Leenders, managing director of personal finance at UK Finance, said: “Fighting fraud must be a priority for everyone and these new rules will be an important tool in protecting customers, helping keep them safe when they shop online.
“Today’s FCA plan, which supports our proposals for a managed rollout, will help the industry ensure a timely migration to SCA and result in the best outcomes for consumers while effectively balancing both convenience and security.”
Earlier this year the European Banking Authority said more time was needed to implement SCA due to the complexity of the changes and the lack of preparedness.
“The FCA has been working with the industry to put in place stronger means of ensuring that anyone seeking to make payments is not a fraudster,” said Jonathan Davidson, executive director at the FCA.
“While these measures will reduce fraud, we want to make sure that they won’t cause material disruption to consumers themselves; so we have agreed a phased plan for their timely introduction.”
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The regulator said it will not take action against firms if they fall foul of the new rules during the grace period, provided they have taken steps to comply with the plan.
After 18 months, all online payments will be subject to the extra security measures.
Main image credit: Getty