Reducing fraud and risk – seamless, borderless payments with a new approach to identity

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The e-commerce sector drives great innovation in the online payments sector. Consumers want to be able to pay wherever and whenever, and they want to pay easily and at a fair cost. These new consumer needs and demands trigger inspiring questions about a new approach to digital security and online identification. Ecommerce Europe brought over 350 stakeholders of the European e-commerce industry together to find common answers to these new questions at its Annual Conference 2015 in Barcelona.

Don’t make consumer authentication too complex

Disruptive market solutions have started to emerge, and the payment industry has shown that consumer ease does not have to compromise security or protection against fraud. Nicolas Vedrenne from the Merchant Risk Council, a global forum for e-commerce fraud and payments professionals showed in his presentation at the Ecommerce Europe Annual Conference that consumers already break off the payments transaction when authentication takes longer than one second. He asserted: “The new European payment rules should not prevent innovation. If we make consumer authentication too complicated, consumers will go elsewhere”.

Alipay on the rise in Europe

Yana Peng of Alipay showed that the markets outside of Europe are ready to take their unhappy consumers. Alipay already offers a vast range of innovative payment products to consumers in China, and is expanding their services such as wallets, credits, financial services, and insurance now to Europe as well. According to Peng: “Convenience in payments is no longer a service, it is a lifestyle. Our consumers demand innovative solutions and complementary products.” Currently, Alipay is already implementing instore mobile e-Wallet solutions in Italy and other European countries.

e-Identification part of easy solutions of the future

In the morning session of the Ecommerce Europe Annual Conference session on payments merchants, policy makers, and the payments and identification industry discussed where the online payments and identification market is headed in line with developments as sketched by Mr. Vedrenne and Ms. Peng. Mobile technology and connected consumers demand easy solutions in a safe environment. e-Identification can add significantly to this in terms of age verification, signing of contracts etc. It became clear from the discussion that governments can stimulate the development of these solutions by bringing together online identities in interoperable and cross-border legislative frameworks. However, as Gabór Bartha from the European Commission noted, authentication developed by governments will remain very slow, and competition between the public and the private sector is needed to speed up the process of creating a European online identification system.

More regulation needed?

The second part of the session on payments focused on the possibilities recent changes in European legislation have opened up, and most notably on where there is still innovative potential left untapped. Traditional roles between regulators, banks, and other payments providers have been reformed drastically. This new class of payments cannot go without proper communication and guidance from the European regulators on how merchants can address these. On the other hand, regulation protecting the consumer and the merchant should not create additional burdens and hamper new business models. In this light it was interesting that where the European regulator, Erik Nooteboom from the European Commission, assessed that with the recent Payment Services Directive 2 “we are good for another 5 years”, Trevor Bowcher from Bitnet – a digital currency platform – asked for more regulation specifically on bitcoin and other digital currencies to help develop in its usage. According to Bowcher, “more regulation brings certainty and stability”.

Ecommerce Europe’s view on payments

For an overview of Ecommerce Europe’s view on the role of regulation in creating a European payments landscape, please download the Ecommerce Europe Priority Paper (May 2015).

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