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In a letter seen by the Financial Times, trade bodies for the European banking sector wrote to the European Commission and Europe’s top banking regulator on Tuesday asking for an EU-wide effort to manage risks created by the new rules.
The planned changes, which are part of the EU’s Second Payment Services Directive, will require most online payments above €30 to go through an extra level of verification such as entering a code received via a text message.
The measures are designed to reduce fraud rates, but companies fear that they have not been given enough time to prepare. Banking and payments executives said some new systems had not been tested at scale, and many smaller businesses did not yet have access to the necessary software.
The ecosystem needs a bit more time for full implementation and we are therefore calling on the Commission and the EBA to take action Wim Mijs, chief executive of the European Banking Federation The European Banking Authority, which is responsible for ensuring consistent application of bank rules across the EU, is expected to discuss the issue at a meeting of its supervisory board on Wednesday.
Research by the UK Finance trade body estimated that, without a significant change before September, between 25 and 30 per cent of ecommerce card transactions would become impossible to complete. The figures were cited in Tuesday’s letter, which was also signed by the European Savings Banks Group and European Association of Co-operative Banks.
The letter said the rules could lead to a “massive loss of revenue for merchants”, severe disruption for consumers and a surge in complaints that “would overwhelm our members’ regular customer service operations”.
It warned of “a serious risk of disruption per 14 September 2019, of e-commerce and a number of other retail sectors”. [...]
Full article on Financial Times (subscription required)