The United Kingdom is implementing additional security checks for online shopping and this is being viewed as a blow to e-commerce businesses by some analysts. Two-factor authentication has become mandatory as cyber fraud is increasing each year in the country by about 376 million pounds.
Data from Barclays reveal about 30 percent of online shoppers will be moving back to physical stores for purchases as the security checks have become a lengthy process and taking a long time. The company processes more than 30 percent of only payments.
Barclaycard Payments CEO Rob Cameron said the PIN and Chip rolled about 16 years ago and for the first time since then the biggest change is being witnessed with respect to consumer payments.
He added that consumers will understand the new rules gradually and will know what will be asked at the checkout page in online shopping.
According to the company, more than half of the total online shoppers in the country have implemented strong authentication verification and agree the move is to make shopping safer. Some argued not to continue shopping with such merchants who will reject their payments without explanation.
Meanwhile, about one-fourth of the shoppers have reported being abandoning online purchases as the time taken in the two-factor authentication is too long.
Cameron further said that shoppers henceforth need to be well prepared for longer than the usual time taken in online shopping and the extra time is for safety and security from frauds.
The financial watchdog has called for a strong regulation in the online shopping segment to minimize cyber fraud. However, as of now, the transactions which are not more than 25 pounds will not be undergoing the additional check.
A data of Action Fraud reveals the losses suffered in 2020 and 2021 due to online frauds mounted to 2.35 billion pounds in the UK and there were about 876,000 reports in the period. The number of arrests was just 5,835 in England and Wales for fraud offenses. Compared to the arrests made in 2015, a decrease of 60 percent was witnessed.
Office for National Statistics research documents that just 15 percent of the total frauds are reported.
UK Finance managing director Katy Worobec called on the government to come up with a fraud minister to cope with the increasing cybercrime instead of simply designating a security minister.
However, it is believed the new norms for strict verification in online shopping may curb to crime rate to a great extent, but it is simultaneously feared that e-commerce businesses may suffer a drop in revenues.