Neale Richmond (Dublin Rathdown, Fine Gael)
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141. To ask the Minister for Transport, Tourism and Sport the reasoning behind customers being unable to complete their car tax payment online by credit card due to a new financial regulation PSD2; if his attention has been drawn to the matter; his plans to rectify same; and if he will make a statement on the matter. [35952/21]

Hildegarde Naughton (Galway West, Fine Gael)
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My Departments Driver Vehicle and Computer Services Division manage the National Vehicle and Driver File (NVDF) and its associated online services. This includes the Online Motor Tax service at www.motortax.ie which enables vehicle owner’s tax their vehicle over the internet. The online service integrates with Payment Service Providers (PSP’s) as part of the operation of the service itself.

The revised Payment Services Directive (PSD2) of 2015 introduced strong security requirements for the initiation and processing of electronic payments, which apply to all PSP’s. PSPs are obliged to apply strong customer authentication (SCA) when a payer initiates an electronic payment transaction. SCA under PSD2 requires the customer to go through two-factor authentication made up of elements from two of three separate categories: knowledge, possession, and inherence. SCA is a combination of something you know (a password or PIN), something you have (a card reader or token generator) and something you are (a fingerprint). SCA is intended to reduce the risk of fraud for all types of electronic payments (especially online payments). SCA requirements under PSD2 were mandatory by 31 December 2020. My colleague the Minister for Finance is responsible for Ireland's compliance with the Payment Services Directives.

My Department's online motor tax website is fully compliant with the PSD2 SCA requirements and this involves capturing additional information on the cardholder during the payment process itself, and this information being subsequently shared with the cardholder's bank. The cardholder's bank will validate this against the data they have for the cardholder and determine if the cardholder needs further authentication when processing their transaction, and if so, what that authentication will entail. The changes have not had any adverse impact on the service itself, with just under 1.9m online tax discs issued for January to May 2021, compared to just over 1.8m for the same period in 2020, an increase of 5%. The online service represents 90% of overall motor tax transactions for this period, compared to 85% for the same period last year.

Along with retailers, it is however important to note that the new requirements themselves have some immediate implications for cardholders themselves. That extra layer of security is meant to protect both cardholders and retailers from fraudulent payments, but it also makes shopping online a little more complex. Cardholders may in some cases have to make appropriate security arrangements such as providing their phone number to their bank for SMS authentication etc. Any cardholder issues my officials have encountered to date have in the main been in relation to this, and have required referring the cardholder back to their bank for assistance. My officials are however continually monitoring the new requirements, and have engaged with the financial institutions directly to assist with any such queries where possible.