The impact of regulation on retail payments security: Evidence from Italian supervisory data

Massimiliano Cologgi

Finance Research Letters, 2023, vol. 54, issue C

Abstract: This paper assesses the impact of the new strong customer authentication (SCA) requirements introduced by the revised Payment Services Directive (PSD2) on the security of remote payments in Italy. We find that the regulation was effective in improving remote payments security, saving consumers several million euros in terms of less fraud on online transactions. Using a model for panel data, we estimate that SCA reduces the risk of fraud by 60 percent for remote payments made by card and by 80 percent for e-money payments. We also find that the transactions for which the regulation provides an exemption from SCA requirements are relatively safe.

Keywords: Payment fraud; Remote payments; Cross-border payments; Strong customer authentication (search for similar items in EconPapers)
JEL-codes: E42 G21 G23 G28 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:54:y:2023:i:c:s1544612323001721

DOI: 10.1016/j.frl.2023.103799

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