The UK along with Slovakia and Estonia have rejected a set of European security guidelines designed to make online payments more secure. However the rejection of the payment guidelines is not due to a lack of industry concern but more the fact that British financial institutions already have tighter security standards and are undertaking new measures to improve customer security online.
Dirk Haubrich of the EBA (European Banking Authority) told the Financial Times:
“If major internet fraud happens with a big bank, we will then approach the regulator and say: this is what the guidelines were meant to prevent. There is concern that where security is stronger, the risk of fraud will come to the less strict countries.”
While others may disagree with the UK’s decision to reject the guidelines, from a business perspective it might entice payment service providers to relocate to countries such as the UK where the security requirements are less onerous but with uncertainty over the future relationship between the UK and European Union this migration will be more of a trickle than a torrent.
Overview by Tristan Hugo-Webb, Associate director, Global Payments Advisory Service at Mercator Advisory Group
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