Shoppers warned that changes to debit and credit cards could see payments declined

Shoppers could have their debit and credit cards declined as banks introduce new changes from tomorrow (March 14).

As of tomorrow, retailers must check that it is you making the purchase before taking the money from your card which means some customers will face an added step when buying things online.

When making an online purchase, customers will be sent a code by their bank, usually to their mobile phone, which they must enter at the checkout before the payment will be approved.

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However, there is still a chance the payment could be declined if the transaction cannot be verified as being genuine.

If the retailer is not set up to make the checks, this may also lead to payments being declined.

The changes are coming into force as part of a new Financial Conduct Authority (FCA) fraud-prevention rules, known as ‘Strong Customer Authentication (SCA).

The idea is to create a new level of security and help protect shoppers and their money.

But banks have now issued a warning to customer that card payments could be declined if retailers are not ready by tomorrow.

First Direct told current account holders in January: “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.

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

Everything you need to know about the new rules

Why are the rules changing?

Further checks are being implemented as a way of clamping down on bank card fraud where fraudsters are using stolen details.

What exactly is changing?

From tomorrow, online retailers will be required to verify shoppers’ identities before authorizing payment. A one-time passcode will be sent to the bank account holder, usually via a text message, but other options are available. Alternatively, you could be asked to approve it by logging into your mobile banking app.

Will I have to verify every time I buy something?

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

Is anything exempt from verification?

Some things such as low-value purchases or those deemed to be minimal risks are exempt. Retailers with low fraud levels will also be able to wave through larger payments without going through any further checks.

What about monthly payments or subscriptions, like Netflix?

Anyone who makes regular payments for subscriptions will not be asked to enter the code each time the money leaves your account.

My signal is not great. What happens if I don’t get the message?

This is the case for a lot of people, but if you make sure your bank has all of your contact details so there is an alternative way to reach you, such as landline numbers and an email address. It’s not clear currently whether card firms will have to try more than one avenue for verification, and which if any they must do first.

I’m already verifying some payments. What’s changing?

Some banks already have this method in place when you spend a large sum of money or when you use a website for the first time.

The new rules were meant to be implemented in September 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 totaling more than £300, when you are asked to verify your identity by entering your PIN.

Will this apply to all payments?

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 totaling more than £85;
  • New or modified recurring payments.

Will I have to verify Paypal or Klarna payments?

These new rules will apply to transactions made through PayPal and by-now-pay-later firms, such as Klarna.

What about Apple Pay?

Apple Pay already meets the requirements, as customers must enter a passcode or prove their identity using fingerprint or facial-recognition technology.

Are all retailers ready for Monday?

A lot of larger stores, such as Amazon and Asda have had these rules in place for some time. But some of the smaller stores have said they will struggle to implement it in time for the deadline.

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.”

How do I know the text is not a scam?

Banks will never ask you to confirm personal details like a pin, password, date of birth, address or anything that could identify you. If you’re asked anything personal like this then it is most likely a scam. It’s also important to remain vigilant and be aware that some scammers may use these new rules as an opportunity to try to get their hands on your personal and financial information.

If my payment is declined, will it affect my credit score?

Your credit or debit card being declined won’t have any impact on your credit score.

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