New EU Privacy Laws Will Make E-Wallets Safer for Everyone Worldwide
More and more of life nowadays is conducted online. From social media to streaming movies on Netflix to grocery shopping, many aspects of our daily routine are not possible without an internet connection.
Since online shopping has evolved into such a big deal, this trend would surely catch up with payments, too. Online payments have been possible for a while now, but only recently have e-wallets started to become more widely adopted. Now, thanks to the new EU privacy laws, they are expected to become safer for consumers, too.
GDPR to Set Stricter Rules on Data Protection
The new General Data Protection Regulation (GDPR) is the cornerstone of European legislation on protection of personal data, replacing previous regulations. It aspires to provide a stricter and more comprehensive system of protecting personal information and recognises privacy to a fundamental human right.
It will go into effect this year, on May 25, 2018, and will impose more obligations on businesses and organizations that handle the personal data of EU residents. If companies fail to comply with the strict requirements, they face fines of up to €20,000,000 (roughly $24,000,000) or 4% of their total global profits.
The GDPR imposes obligations that include taking technical measures like data encryption and pseudonymization so that companies can ensure that they are adequately protected against security breaches and hackers. It also gives certain rights to the individuals that are the subjects of the personal data and demands that a response plan is in place in case of a security incident.
What makes it relevant for US companies too is the fact that the GDPR applies to any organization that provides goods and services or monitors persons within the EU, even if the company is not based in the EU.
E-wallet Providers Will Have to Adopt More Secure Standards Worldwide
This in effect means that any company that provides services to people on EU soil must upgrade their security standards to comply with the new regulation. It is hardly efficient to have different types of protection built within one service.
It is equally ineffective to have to be able to pinpoint in real time and with accuracy whether a given client is within the EU in order to switch between levels of security – since the GDPR will apply to everyone within EU borders, irrespective of whether they are citizens of one of its member-states. Therefore, companies will most likely be forced to apply the new standards universally. This also holds true for e-wallet companies like PayPal or Skrill.
When they do, every client who uses digital wallet services will benefit from greater security and increased privacy. This is very important, especially in light of the fact that a leading reason that people do not opt for digital wallets is concerns that relate to lack of security: 39% of respondents to a survey from November 2017 stated that the main reason that they do not use digital wallets is because they do not perceive them as safe.
E-wallets are a rising market – it is estimated that in 2017, 32% of consumers used a digital wallet and 78% were aware of the option – so eliminating safety concerns might be crucial to the further penetration of this particular method of online payment.
The clock is ticking for companies to implement the new safety standards, as only a few months remain until the GDPR deadline – and soon both EU and US consumers will see a higher level of protection when using digital wallets.