The pandemic has drastically affected how consumers are shopping and paying for even routine purchases, and this in turn has altered how businesses are accepting their payments.The rise of online and contactless transactions in the European Union, for example, has meant that many merchants are making the bulk of their sales away from brick-and-mortar stores.
Small- to medium-sized businesses (SMBs) have been especially hard hit, as many have pivoted quickly to enable online transactions and adhere to the regulations that often accompany them. SMBs and merchants operating in the EU must comply with strong customer authentication (SCA), which mandates stricter authentication requirements for online and contactless purchases above a certain value. The health crisis has brought about changes to this rule, however, and these may have long-term implications for payment standards and regulations.
In the latest Merchants Guide To Navigating Global Payments Regulations®, Fintech Zoom analyzes how the pandemic has affected SMBs in the EU, the United Kingdom and the United States. It also examines how 
the pandemic’s effects are shifting the ways merchants and customers view payments and their financial relationships.
Around the Data Protection World
Financial players around the world are upgrading or launching solutions to help them offer swift payments. Canadian payments service RevoluPAY, for one, recently received a Pan-European revised Payment Services Directive (PSD2) banking license that allows it to provide solutions for businesses in the European market. The service aims to support B2B payments with application programming interfaces (APIs) that promote quick transactions. Banco de España, Spain’s central bank, granted the license, which enables RevoluPAY to operate within all 27 EU member countries. Regulators originally looked to use such licenses to shore up open banking and offer more support to digital-only banks and financial services.
Other entities are launching solutions designed to respond to SMBs’ and merchants’ shifting payment concerns amid the pandemic. Some regulations have recently been modified to offer customers and merchants added flexibility, with the contactless payment limit past which SCA requirements apply being increased in the EU and UK. from 30 euros to 50 euros ($33.67-$56.12), for example. This change has prompted more compliance-related questions from SMBs, however, and ePayments provider Ingenico has crafted an SCA suite that leverages online security protocols to assist firms with following the requirements.
Data privacy and security continue to be top priorities for many regulators, too. The Irish Data Protection Commission (DPC) recently submitted a draft decision on whether social media site Twitter violated the EU’s Basic Knowledge Safety Regulation (GDPR) requirements with its information assortment strategies. The DPC has been investigating how the social media service handles its customers’ information since 2018, when it acquired its first criticism alleging that Twitter was not adhering to GDPR necessities. The draft resolution is at the moment not out there to the general public, however Twitter could possibly be fined for noncompliance whether it is discovered to have violated the rule.
For extra on these tales and different headlines, learn the Tracker’s Information & Traits.
How the Pandemic Is Driving Contactless Funds Ahead
SMBs are responding rapidly because the pandemic modifications the fee panorama, with closures of brick-and-mortar areas main extra clients to buy their items by way of on-line platforms. Even customers who do enterprise to shops are turning to touchless fee strategies to keep away from virus-related potential well being dangers, thus accelerating an ongoing shift towards contactless funds in sure areas.
Such transactions have been well-liked within the UK. for a while, for instance, however the guidelines hooked up to them have c
hanged as their adoption grows, and the pandemic may have long-term results on how these guidelines are structured sooner or later, Maha El Dimachki, head of funds for the UK.’s Monetary Conduct Authority (FCA), defined in a latest interview with Fintech Zoom.
To be taught extra about how contactless funds utilization and different behaviors are altering because of the disaster in addition to how banks, retailers and regulators are responding, go to the Tracker’s Characteristic Story.
How SMBs Can Reply to Shifting Fee Laws After the Pandemic
SMBs are finalizing and accepting giant volumes of on-line and contactless transactions as a rising variety of customers flip to those strategies. These purchases should be authenticated beneath current safety and open banking guidelines within the EU and the UK., nevertheless, notably SCA. Shifting requirements and questions concerning SCA have thus begun to proliferate among the many areas’ retailers as they wrestle to adjust to the rule whereas guaranteeing they will fulfill their clients’ fee wants.
To be taught extra about how the pandemic may be affecting customers’ fee preferences and what which means for open banking, go to the Tracker’s Deep Dive.
In regards to the Tracker
The Retailers Information To Navigating World Funds Laws®, a Fintech Zoom and Ekata collaboration, is the go-to month-to-month useful resource for updates on the developments and modifications concerning PSD2 in addition to different privateness and information safety rules.
