Payment warning: Shoppers may have their credit and debit cards declined from Monday

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The new changes coming into force will see cards declined if someone can’t prove their identity. Retailers will be making additional checks before people can purchase items or take money from their cards.

The changes will impact everyone who banks or makes purchases online as they will be subject to extra security checks in a bid to make transactions safer.

Customers will now be sent a code by their bank — usually to their mobile phone — when they make a payment online and they will need to enter this at the checkout for the payment to be approved, ChronicleLive reports.

Alternatively, people may be asked to approve payments by logging into their bank’s mobile app.

Without the identification check to prove the transaction is genuine, the card payment may be declined.

Card provider Mastercard estimates one in every four payments will require the extra check.

Some online transactions are exempt, though. But these are only the ones deemed low risk.

Each provider will have its own definition of ‘high risk’ and ‘low risk’ transactions, but, according to Moneysavingexpert.com, the following are typically more likely to be verified:
Online payments over £25; Online payments up to £25 where you’ve made multiple payments in a row totalling more than £85;
* New or modified recurring payments.

These new rules are being enforced in a bid to stop fraudsters capitalising on Britons. The pandemic and lockdowns have sparked a rise in financial crime and scams.

The changes are coming in under new Financial Conduct Authority (FCA) fraud-prevention rules, known as ‘Strong Customer Authentication (SCA). The idea behind the move is to create a new layer of security to protect shoppers and their money, but some banks have already warned their customers that card payments could be declined as some retailers may not be ready by March 14.

Late in January, First Direct told current account holders: “As we get closer to the regulatory date, the number of times you’ll notice you’re asked to verify it’s you making the payment will increase.

“‘If the retailer isn’t ready for the new process, there could be times when your card might be declined.”

If people make regular payments for subscriptions on their card such as Netflix or Spotify, they will not be asked to enter a code each time the money leaves their account.

It’s important that the bank has all of someone’s contact details so there are alternative ways of reaching them, such as mobile and landline numbers and an email address.

Lloyds bank warned: “To help keep you and your accounts safer from fraud when you use your debit or credit card to shop online, we’ll ask you more often to confirm it’s really you making the payment.

“You might have already seen this happening when you shop online, and it’ll happen more often from now on.”

Some banks and retailers are already using the extra security check for customers spending a large sum of money or when they use a website for the first time.

The new rules were supposed to be in place by September 14, 2019. But the deadline was extended by 18 months, and then pushed back again due to the pandemic.

The new SCA verification process is an extension to the rules that has applied to online and mobile banking since 14 March 2020, so you may have already noticed certain actions requiring identity confirmation, including logging in and transferring money to somebody else.

And SCA checks also already apply if you make multiple contactless payments in a row totalling more than £300, when you are asked to verify your identity by entering your PIN.

The new rules also apply to transactions made through PayPal and buy-now-pay-later firms, such as Klarna.

Many larger stores, such as Amazon and Asda say they have been prepared for the new rules for some time.

Mike Cherry, chairman of the Federation of Small Businesses, said: “With current turbulent economic conditions, small retailers already have a lot on their plate and may not have the bandwidth to manage this alone, especially if a small online retail operation is a bolt-on to a mainly bricks-and-mortar business.”

Britons should be vigilant when receiving text messages to ensure it is not a scam.

Your bank or card firm will never ask your PIN, password, date of birth, address or other personal details to verify a payment under this system, so if you’re asked for anything other than a verification code it’s likely a scam.

Some scammers may use these new rules as an opportunity to try to get their hands on one’s personal and financial information.

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