The European Union has issued new rules for contactless payments, which has caused confusion and forced one digital bank to issue new cards, according to a report in the Telegraph.
The move could potentially affect 57 billion euros ($62.4 billion) in revenue to businesses throughout Europe.
The Strong Customer Authentication (SCA) regulations say a bank has to verify a person’s identity whenever they make a payment that totals 100 euros ($109.45). If a customer goes over that limit on several card payments, then they’ll have to enter a pin.
The main fear is that the new rules will have customers walking away instead of trying to pay. A company called 451 Research published a report, commissioned by payments company Stripe, that said an estimated 57 billion euros in payments could be lost because of the rule.
The head of research at financial technology consultancy 11:FS, Sarah Kocianski, said the changes have already caused problems. Because of the rules, there’s “customer confusion as to why debit cards are now being declined at terminals with no apparent explanation,” she said.
The Financial Conduct Authority (FCA) has delayed compliance deadlines to 2021, but some banks have started to take action regardless. The FCA said the complication of the rules and a general lack of time to get ready for them is why they chose to delay.
The new rules are meant to battle fraud and stop huge bills from being racked up.
RBS is also dealing with the departure of Bó head, Mark Bailie, a mere two months after the launch of the digital venture.
“In the context of Mark Bailie’s departure and given we have not seen the likes of Revolut or Monzo make such a move yet,” said John Cronin, a banks analyst for Goodbody, “it will undoubtedly serve to fuel further speculation concerning the bank’s commitment to Bó.”