The Dutch government has released a statement warning that the implementation of its controversial sales tax, or SCA as it is called, will cause serious damage to online retailers. It also seems like other countries are looking into following suit which could have major implications for retail in general and cryptocurrency specifically if they end up implementing their own taxes on top of this one.
Online retailers have now been warned to be ready for the introduction of Strong Customer Authentication (SCA), the most significant change to the payments since Chip & Pin rolled out nearly 16 years ago.
The laws and regulations requiring a 2-step verification procedure for any online transactions above 30 Euros, which were originally scheduled to go into effect on September 14, 2019, went into force on March 14.
In this context, the FCA encouraged issuers to apply the rules early in February, resulting in up to 75% of payment traffic being soft-dropped and forwarded to 3DS (3d-Secure) for further validation checks.
According to Barclaycard Payments, which processes £1 out of every £3 paid on debit and credit cards in the UK, retailers risked losing £102 million in sales in the previous month.
In February, according to Barclay’s statistics, 43,000 transactions worth £3.64 million were denied at the point of sale. According to the research, 1% of buyers saw an uptick in their online payments being denied last month.
Furthermore, 37% moved to a different store to finish their transaction, and the same percentage said they are unlikely to buy with a business again if their payment is denied without reason.
According to Adyen, roughly 44% of organizations are prepared for the new standards.
Rob Cameron, CEO of Barclaycard Payments, said:
“Merchants that aren’t yet ready should make compliance a top priority to avoid losing business. Our data has already shown the consequences of not being prepared, and this will only worsen if no action is done now. The message to businesses is clear: if you don’t make online shopping simple and convenient for your clients, they will go elsewhere.”
Nick Raper, the director of Nuapay, believes that a change to open banking payments would provide customers and online businesses with a route out of the quagmire:
“The industry has to stop talking about security and start looking at solutions like open banking payments to guarantee that the effect on consumers is minimal and merchants have the tools they need to be compliant.”
