Retailers could miss out on £60bn as new anti-fraud rules are introduced

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Retailers could lose out on as much as £60 billion of online sales if tough new anti-fraud rules are introduced.

The British Retail Consortium (BRC) has warned that the “two-factor authentication” process set to be introduced after September 14 for all online purchases of more than £30, could cost the industry billions.

Dubbed Strong Customer Authentication (SCA), the BRC are concerned that not enough businesses are aware of its upcoming implementation.

“Without a smooth and successful implementation of SCA, there is a real risk that these changes will create difficulties for consumers when making purchases online,” the BRC’s Andrew Cregan said.

READ MORE: Instagram accounts promoting fake luxury goods has tripled since 2016

“The Government and Financial Conduct Authority must ensure a consistent and coordinated approach to implementation, clearly explaining the upcoming changes to consumers and businesses alike if we are to avert significant disruption.”

In an effort to mitigate the potential losses, the BRC is meeting with other business groups including the Federation of Small Business (FSB), the Institute of Directors and the Financial Conduct Authority (FCA) today to discuss a strategy moving forward.

The FSB’s national chairman Mike Cherry added: “Small business owners are absolutely committed to customer security, but rolling out SCA before businesses and shoppers are prepared for it will be bad for all concerned. We’re a few months from enforcement and hardly anyone has even heard of it.

“Generally speaking, the SCA process will make online shopping less enjoyable. If you’re on the move and looking to make a one-click, low-value purchase on your phone, the last thing you need is all sorts of authentication barriers coming-up. There’s a good chance those kinds of sales will be lost once SCA is rolled out.”

There are questions remaining about the details of how the system will work, like whether the banks or the customer choose which two types of authentication they want to use.

An FCA spokesperson said: “We’re hosting a meeting [on Friday] to discuss the EU’s strong customer authentication requirements with industry. These new standards will be introduced in September and are designed to protect consumers from fraud.”

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