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United States Debit cards declined - Inside the new rules change coming into effect today
New banking regulations, known as ‘Strong Customer Authentication’ (SCA), have been put in place to improve online payment security and protect debit and credit card users from fraud. As of midnight going forward, shoppers will have to go through a two-factor authentication in order to make purchases online, however, if you aren’t able to prove your identity, your card will be declined.
A report published by UK Finance in 2021 found unauthorised financial fraud losses across payment cards, remote banking and cheques totalled £783.8 million when analysing 2020 data.
To prevent this figure from spiralling, banks are cracking down on fraud risk by introducing new steps for shoppers using debit and credit cards online to verify their purchases.
How to avoid having your debit card declinedTo minimise the risk of your debit card declining when making a purchase, first make sure your card provider has your most up-to-date contact information.
READ MORE: Scam warning: ‘Best way for victims to recover funds’
This includes your mobile number, landline number, and email address, if you have all of these.
This will help your card provider get in touch with you easier as and when required.
When you next purchase an item, online retailers will require you to verify your identity before authorising the payment.
To verify your payment, a one-time passcode will be sent typically via text message, but most banks will also offer the option to send an email or landline message containing a verification code if you have poor internet signal.
Retailers with low fraud levels will also be able to allow larger payments without going through any further checks.
The new rules will also apply to transactions made through Klarna, PayPal, and other buy-now-pay-later firms, apart from Apple Pay, which already meets two-factor authentication requirements through the use of fingerprints or face recognition technology.
If your payment is declined, it will not affect your credit score.
These new payment authorisation measures are not a one-off, meaning you will receive a text whenever you make a qualifying payment online - so don’t ignore these calls or your payment will decline.
However, it’s important to note that scammers may use this as an opportunity to retrieve your personal information.
To be sure the text you are receiving is legitimate, it’s important to remember that your bank or card firm will never ask your PIN, password, date of birth, address or other personal details to verify a payment under this system, so if you're asked for anything other than a verification code it's likely a scam.
