E-commerce – Image by Varun
(BRUSSELS) – New EU rules on online shopping, which came into force on Saturday 14 September, should make it easier and safer for consumers to pay for goods and services online and to manage their personal finances.
European consumers are also set to enjoy improved protection against online fraud, as well as better access to more innovative forms of online and mobile payments.
Over time, the Commission says the new rules will give consumers more choice since new and innovative operators will enter the payment market.
With the entry into force, all elements of the revised Payment Services Directive (PSD2) are now in place, says the Commission.
Some stakeholders are still working to put these technological and practical changes in place, in line with a gradual approach suggested by the European Banking Authority.
The Commission is now calling on all EU Member States to ensure speedy and full implementation of all the rules. Once the new framework is fully operational everywhere, it says EU consumers should be able to benefit from a safer and easier online payment environment in two key ways.
First, electronic payments will be even more secure thanks to the introduction of strong customer authentication (SCA) which will improve our means of tackling online payments fraud. SCA ensures proper identification or authentication for all payments over 30 and will now take place via an authentication process based on two specific factors supplied by the user, e.g. a password, PIN code, a mobile phone or a fingerprint. Customers will receive practical advice from their banks or payment providers on the new system.
Second, the new rules will facilitate the entry of new operators in the EU payment services market by applying equally to both traditional and new, innovative companies that offer regulated payment services. Consumers will be able to make payments and manage their personal finances more efficiently thanks to a wider offering of applications.
Companies offering these services, or FinTechs’, are now brought fully under the scope of EU rules. To enable these players to offer a full range of consumer services, banks must establish new and highly-secure communication channels to share data and authorise payments.
At the same time, FinTechs’ need to comply with the same level of stringent data protection standards.
This modernisation of Europe’s payment services will also further strengthen the Digital Single Market. The revised Payment Services Directive (PSD2, Directive 2015/2366/EU) applies since January 2018 and enables the emergence of innovative payment services, including internet and mobile payments, while at the same time ensuring a more secure environment for consumers.
Safer, easier electronic payments and online banking - background guide
