Despite the shift to e-commerce, thousands of Irish small businesses risk losing sales by failing to prepare for Strong Customer Authentication (SCA) requirements.

More than half (53 per cent) of Irish consumers intend to continue shopping online where possible, as the Covid-19 pandemic continues to impact consumer spending in Ireland.

With this trend set to continue for the foreseeable future, the importance of e-commerce has never been higher in the Irish economy.  

Restrictions on in-store trading during lockdown has spurred one quarter (24pc) of Irish SMEs to begin selling online for the first time.

“Since the outbreak of Covid-19, online trading has become increasingly vital for small businesses to reach their consumers”

However, despite the increased appeal of eCommerce, thousands of Irish SMEs risk being unable to trade online successfully due to not having new security features enabled as part of the EU Payment Service Directive (PSD2).

New measures

From 1st January 2021, online transactions in Europe will be subject to Strong Customer Authentication (SCA) measures – requiring banks to request additional information from consumers, such as a fingerprint or four-digit one-time passcode, to verify a purchase.

Those businesses that have not prepared for the regulation, and therefore cannot always deliver compliant transactions, may find that banks have to decline customer payments.

Given Covid-19 has been the primary focus for most Irish businesses over the past few months, Visa is highlighting the deadline for SCA compliance to ensure companies avoid disruption to their online services in the run-up to the crucial Christmas shopping period.

The Visa-commissioned research found that 73pc of Irish small businesses have a desire to increase their online presence.

“We are urging any Irish small businesses selling online to contact the company that hosts their online checkout service”

As a result, Visa is urging Irish small businesses to contact the company that hosts their online checkout service to help them implement 3D Secure – in Visa’s view the technology most suited for meeting SCA requirements.

“Since the outbreak of Covid-19, online trading has become increasingly vital for small businesses to reach their consumers, said Philip Konopik, Ireland country manager for Visa, when speaking about the findings.

“There is a real risk, however, that thousands of Irish small businesses will suddenly find this critical source of revenue switched off because they have failed to prepare for Strong Customer Authentication requirements.”

Mr Konopik added that while Covid-19 is the priority for businesses across Ireland right now, business owners must start preparing for the new measures coming in next year.

“The deadline set by the European Banking Authority is approaching quickly. We are urging any Irish small businesses selling online to contact the company that hosts their online checkout service as soon as possible to switch on the most up-to-date 3D Secure technology and ensure that customers’ transactions are not declined come the New Year.”

The research with small business owners was conducted by Wakefield Research in June among 250 small business owners at companies with 100 employees or fewer in Ireland.

Separately, the consumer portion of the survey involved one thousand adults over the age of 18 in Ireland.

By Stephen Larkin

Published: 31 August, 2020

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