Following the news that the Strong Customer Authentication rules launched in the UK on Saturday 14th September, Samuel Murrant, Senior Payments Analyst at GlobalData, a leading data and analytics company, offers his view on the change:
“The new EU rules will undermine the convenience of contactless card transactions, potentially providing an opportunity for mobile wallets to take a more prominent place in the market.
“The UK is a nation of contactless card enthusiasts, with 68% of consumers surveyed by GlobalData in 2019 reporting that they use a contactless card to make payments at the point of sale. The use of contactless cards is primarily driven by their convenience compared to cash and other cards, and introducing a point of friction (PIN entry) for transactions on a regular basis will reduce the convenience of these cards. By comparison, mobile payment options will appear more convenient, since the user never needs to enter a PIN.
“This measure does address consumer concerns about the ease of fraud on contactless cards if stolen or lost, but in doing so it curtails their main strength – convenience. We may see the deployment of smart payment cards with in-built biometric fingerprint readers in response to the SCA regulations, but it seems more likely that consumers that strongly value convenience in payments will instead move to mobile wallets.”