Specialized consumer credit providers develop online applications on their websites thanks to partnerships with merchants that allow consumers to apply for a consumer credit directly on a lender’s website or on the website of the supplier of the good or service. However, the European Anti-money Laundering Directive (AML) can be an obstacle to these financial transactions. Ecommerce Europe believes that a pan-European e-Identification solution can be a solution to the current long and burdensome processes for merchants and consumers.
A burdensome procedure for consumers’ identification
Under the Directive, situations where the consumer is not physically present for identification purposes are classified as high risk transactions. This means that a credit provider would need an official copy of the consumer’s ID and a proof of his address. This process can be long and burdensome for the consumer who may find it more convenient to visit a local provider for financial services rather than an online retailer, with negative effects for the e-commerce sector.
The situation differs a lot in Member States. In some countries, no distinction is made between face-to-face and distant methods for identification like in Poland, while in other countries such as Czech Republic electronic identification is not considered valid. This does not create a level playing field throughout Europe and is an obstruction to the Digital Single Market.
Pan-European e-Identification as a solution
Increasing the availability and use of electronic signatures (eSignatures) and electronic identification (eID) could help to alleviate some of the administrative burden for both the consumer and credit provider to conduct retail financial services transactions, such as consumer credit, at a distance. In this way, a non-face-to-face process does not have to been seen as a “high risk” and the provider will have a trustworthy solution to evaluate potential risks.
Ecommerce Europe is a strong advocate of pan-European e-ID solutions and is in continuous dialogue with European and national policy makers to ensure that an interoperable, holistic approach to eSignatures and eID is taken throughout Europe.
The European Commission launched in 2013 the revision of the legislation. It is now in the hands of the European Parliament for a second reading, but clarifying the legislation on identification does not seem to be on the agenda.
Some of Ecommerce Europe’s members, like Allegro Group and APEK have created an AML coalition addressing these issues with European policy makers. Ecommerce Europe will keep its members updated on opportunities to join this coalition.