The European Central Bank has outlined plans to improve the security of Internet payments, requiring firms to beef up their customer authentication processes.
Following a two month public consultation, the central bank has set out its harmonised, minimum security recommendations, which it calls "an important set of guidelines in the fight against payment fraud".
The key plank of the plans requires payment service providers and the governance authorities of payment schemes to protect the initiation of online payments, as well as access to sensitive transaction data, through "strong customer authentication".
In addition, firms should limit the number of log-in or authentication attempts, define rules for Internet payment services session "time out" and set time limits for the validity of authentication.
Transaction monitoring mechanisms must be designed to prevent, detect and block fraudulent payment transactions, while multiple layers of security defences must be roll out in order to mitigate identified risks.
Customers should also be given assistance and guidance about best online security practices and provided with tools to help customers monitor transactions.
The recommendations will be integrated into existing oversight frameworks for payment schemes and supervisory frameworks for PSPs and will have to be implemented by 1 February 2015.
Read the full set of recommendations here