New rules start from March 14, and mean that customers will have to enter a code, which will usually be sent to their mobile phone.
The code will confirm that the purchase has been authorised by the person the card belongs to,
If they are unable to verify the identity of the person making the purchase then the transaction may be declined.
As a result, online shoppers may see some purchases declined as the new system is introduced.
The rules, which have been introduced by the Financial Conduct Authority (FCA), were supposed to come into force a year ago but were delayed to give retailers more time to adapt. The legislation came out of the European Banking Authority and was adopted into UK law before Brexit.
It will apply to debit and credit card purchases and will have the biggest impact on those making what are deemed to be the riskiest purchases. The new rules do not apply if you buy something over the phone.
High-value purchases, or those outside a buyer’s normal spending habits or transacted on a previously unused device, are likely to prompt the extra security check.
Experts have warned that many firms are unprepared and could see a ‘significant’ drop in the number of people completing their online check-out.
HSBC has told customers: ‘Some online retailers may not be ready to ask for these extra checks. This means your online card payment could be declined, even if there’s no issue with your account or your card.’
Barclays has also emailed its clients warning they might start to see transactions declined.
