An EU plan to require passwords or codes to authenticate electronic payments is raising the ire of Visa, which said Tuesday (Nov. 22) the rules could hurt online shopping and may not boost security.
According to a report, the EU wants the passwords or codes on electronic payments over $10.60 as a way to cut down on fraud, which is on the rise online in Europe. The proposal by the European Banking Authority was first made in August.
“These new proposals threaten to seriously disrupt the way we all shop online,” Visa’s chief risk officer for Europe, Peter Bayley, said in a statement to Fortune. “All of this inconvenience comes with no evidence that it will actually reduce fraud.”
Visa went on to argue that eCommerce sales could decline in Europe if the EU rules were adopted because consumers would be put off by the new hurdles to make purchases online. Visa went as far as to say purchases outside of the EU could be blocked as a result of the rules because payment vendors that are not part of the EU may not use the new security standards by the EU. Visa pointed to its survey, which found 51 percent of consumers in Europe shop at online retailers outside of the EU.
The rules for electronic payments isn’t the only area that the EU is eyeing when it comes to cybersecurity. The European Commission is drafting new cybersecurity rules for Internet of Things devices after a number of European security firms have warned that current IoT devices come with little or no security features, according to a report from security blogger Brian Krebs. The rules would apply to devices like smart home devices, web-connected security cameras, DVRs and routers. According to Krebs, the commission is drafting the new security requirements for IoT devices as part of an overhaul of the European Union’s telecommunications laws.
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