Beyond the Transaction: Every Transaction Has a Story

Securing online payments

By Rigo Van den Broeck, Senior Vice President, Cyber & Intelligence Solutions, Europe

The recent months have shown us how much we have become reliant on technology to be able to continue working, shopping and living our lives really. Where would we be today without our digital tools that help us stay connected when we cannot meet each other in person? Technology is evolving fast. It is getting better and, in many ways, making our lives easier to the point that it is now driving the evolution of our lives. Thanks to technology we can have a virtual meeting during which we see each other instead of having to travel to another city or country for that meeting.

Shopping is no different. Technology has allowed us for some time to connect to our favourite shops and buy whatever we want (or rather whatever we can afford) from the comfort of our living room. We still enjoy going to a physical store as the experience is very different, but technology is redefining how we shop and pay here too. The use of contactless technology is currently growing at staggering speed. 80% of our transactions in Europe are now contactless. In a survey we released this past spring, more than 70% of Europeans claimed that the pandemic ending won’t change their contactless usage and more than 2/3 claimed this was now their preferred way to pay in-store.

Equally, e- and m-commerce have also reached new heights in ways that we had not seen before. This evolution, however, also comes with its own challenges. Most of the payment fraud happens online where it is more difficult for the merchant to verify the shopper’s identity. That’s why the EU is introducing new regulatory requirements to make electronic payments more secure by mandating so-called strong customer authentication, or SCA. These will start being enforced across most of Europe as of 1 January. The goal – to ensure that a payer really is who he says he is – is the right one of course, in particular as e- and m-commerce continue to gain ground. At Mastercard, my team has worked hard with all our partners, not only to ensure compliance with the new legal requirements, but also to make the user experience, the shopping experience, as frictionless as possible.

As we are only a couple of weeks away from the deadline, I know that a lot of our partners are still working to make sure that people can continue to use their preferred payment methods with the same ease and convenience that they are used to. From a technical point of view, it is clear what needs to be done even if there is no question that this requires a substantial amount of work, time and resources.

As a result, there is no doubt that a number of players aren’t ready yet. We also know that nobody gets it entirely right the first time which is unsurprising given the complexity of the changes required. That’s why testing is so important. It allows for the identification and elimination of those annoying error messages that can make the whole experience particularly unpleasant or even lead to outright declines. My team and all of us here at Mastercard are on standby to continue helping our partners to avoid these. We’ve also published a best practice guide that can help you address the most common errors right away.

But I would argue that the end result is worth the effort. When implemented well, the new protocols (EMV 3DS) and our SCA-compliant solutions simply work better than what we had until now. We see that the average authorization approval rate is higher and this trend will accelerate as the new system provides more data that will ultimately lead to better fraud prevention models. Equally, we see the actual fraud rate drop significantly with the new system.

As industry players, it is important that we pull in the same direction to make the new requirements work well. We owe it to our cardholders and our customers to make 2021 the year of positive change.