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Two Factor Authentication with your Debit / Credit Card!
  • Extra level of security means you'll be asked by your bank to verify your identity

  • Typically, this will involve typing a unique code into the retailer's web page

  • Each bank will offer a variety of ways of getting hold of this vital new code

  • Most are expected to offer to send it as a text message to your mobile phone 
Shoppers will be asked for a special code when they use a debit or credit card to buy online under a major shake-up to be brought in next year to protect against fraudsters.

The extra level of security means you'll be asked by your bank to verify your identity before you can complete a purchase.

Typically, this will involve typing a unique security code into the retailer's web page after you have entered your card details and clicked 'complete purchase'.

This will be required in addition to the last three digits of the so-called CVV number on the back of your card.

Money Mail understands that each bank will offer a variety of ways of getting hold of this vital new code, which will be different for each purchase.

Most are expected to offer to send it as a text message to your mobile phone. But if you use a mobile banking smartphone app, you may also be able to generate a code there.

Other banks may enable you to obtain a code on a handheld device similar to the card readers customers of some banks use to log into their online banking.

Alternatively, banks could offer an automated call to your landline, where the code is read out by a machine.

Another possibility is a new type of credit and debit card where the CCV security code on the back changes every 90 seconds. 

These devices are still being developed, but if they are rolled out widely, customers will simply enter the three-digit CCV on the card — as they do now — to complete a purchase.

The type of verification you require may vary depending on whether you are shopping on your PC, tablet or mobile phone.

Under the new EU rules, banks have until September 14, 2019 to introduce these changes and are still finalising plans. However, many are expected to launch their new security protection for online shopping much sooner than that.

First Direct, the online and telephone division of HSBC, has already written to customers to explain they will soon have to enter a one-time passcode sent by text to complete certain online transactions using their Visa debit and credit cards.

Fewer than 2 per cent of online purchases currently require shoppers to enter a password before the sale is completed, according to Mastercard.

When this happens, a window pops up asking you to enter a password that you set up with Visa (through its Verified by Visa service) or Mastercard (whose scheme is called Secure Code), depending on which firm processes your bank's card payments.

Last year fraudsters stole a total of £310.2 million from victims by using illegally-obtained credit and debit card details to make online purchases, according to UK Finance, the industry trade body.

Money Mail revealed last week that the full financial details of a British person — including their bank account number, sort code and card information — could be bought for as little as £27 on the internet.

Under the new secure scheme, the number of online payments requiring verification is expected to increase to one in four.

However, some transactions will not require a verification code thanks to a few exceptions to the new rules. For example, you won't need a code for purchases of up to €30 (around £27).

You will then be able to make five payments of up to this amount — or spend €100 (£89) in total — before being asked for extra verification. 

Many banks will also allow you to set up a 'white list' of trusted shops and payees. You will need to prove your identity with a code when setting up or amending this list, but then you can make purchases without restriction.

Regular payments such as subscriptions, memberships or direct debits and standing orders will not require a verification code.

Banks that keep fraud levels low will be able to allow larger payments through without customers needing to go through an extra identity check.

For example, banks that keep fraud levels below 0.1 per cent of all their online payments will be permitted to allow their customers to make payments of up to €500 (£444) without a second check.

City regulator, the Financial Conduct Authority, will assess fraud levels every three months to ensure firms stick to the rules.

Even if a bank has low levels of fraud, it could still ask for a verification code for unusual purchases that do not fit your normal spending behaviour, or if you are shopping from an unusual place, such as via an internet cafe or hotel wifi on holiday.

The new fraud protections are being called Strong Cus- tomer Authentication by the banking industry.

Almost all electronic payments will go through this system, including card and contactless payments made face-to-face and online shopping on computers or smartphones.

The rules specify that customers can only use their cards when they provide two of three different forms of verification.

The first is using something you know, such as a Pin or passcode.

The second is using something you have, such as a mobile phone or card reader. The third is using something unique to you, such as a fingerprint or voice recognition.

That means no changes when you make Chip and Pin transactions, as these already use two types of verification — the card, which you have, and the Pin, which you know.

The £30 contactless payment limit will stay the same but you'll be asked for a Pin after five contactless payments or once you've spent €150 (£133).

Industry sources assured Money Mail that banks will ensure all customers who shop online can find a way of getting hold of the codes they will need to complete purchases. Typically that will mean selecting one of a variety of different verification methods, from text messages to automated calls.

A spokesman for UK Finance, the industry body, says: 'These changes are aimed at further enhancing payment security and reducing fraud.'

Source: A Murray Daily Mail a.murray@dailymail.co.uk

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