If there’s one thing the technologists love, it’s a three-or-four letter abbreviation. And the world of e-commerce is awash both with the abbreviations , and also with solutions that claim to solve the problems associated with adopting or implementing the technology concerned.
There are software solutions for FIDO - Fast Identity Online; for KYC – Know Your Customer; and for SCA – Strong Customer Authentication, which in turn is part of PSD2, the Payment Services Directive, which itself also has a host of potential solutions in the marketplace. PSD2/SCA from part of EU and European Bank regulations that will require compliance from retailers, banks and other players in the e-commerce chain. It’s a subject we have covered extensively.
But all of these various solutions and initiatives have one common objective. Making online trading and transactions safer, more secure, and less open to fraud. The global pandemic has served to further fuel the growth in online trading, and that only emphasises the need to further increase online security. Indeed, the EU’s SCA rules kick in at transactions of just €30.
Online trading also increases the need for retailers to know exactly who they are trading with and also to require certainty and security within each transaction. The customers want protection too – they don’t want their online identity stolen, and their don’t want bank transactions to be open to fraudsters.
The problem is neither side wants that process of identity and payment verification to be time consuming – shoppers get fed up if the process takes too long, meaning retailers lose business if their check-out system is onerous. But in too many cases, the easier it is to pay, the more open the system is to fraud, or just plain old user error.
Smartphones certainly help here – solutions that make use of biometric verification systems built-into modern handsets add certainty to identity verification. But putting a smartphone into the check-out process has to be about more than simply sending a text message. What’s more, not only does that method of adding security not comply with EU’s SCA rules, it is also too easy for technology literate hackers to intercept text messages and complete fraudulent transactions.
The Pandemic has also shown that a well-established technology known by its two-letter abbreviation – the Quick Response or QR code – can also play a key role in the e-commerce chain. The ability of a smartphone camera to both provide facial recognition and read a QR code to determine an action or requirement is a powerful combination. It can turn your phone into a device that reads an instruction from a printed page, or from any screen, and converts it into a request that you can authorise using the in-built biometrics.
In doing so, the smartphone can simply and quickly provide the KYC data the retailer requires, and the customer has authorised; it can meet the ambitions of the FIDO initiative, and comply with the regulations of SCA and PSD2. All at the same time. Now that really is a Quick Response.
You can find out more about our patented approach to using encrypted QR codes to authorise transactions here.