New regulations are coming into effect on 14th September 2019 called Strong Customer Authentication (SCA). SCA is part of the PSD2 regulation in Europe and will impact how your customers authenticate payments online.
You will be impacted by SCA if you meet the following criteria:
- Your business is based in the European Economic Area (EEA)
- You serve customers in the EEA
- Your website or app accepts credit or debit card payments
SCA’s primary aim is to reduce fraud. It is set to achieve this by requiring additional validation steps when making purchases online.
To accept payment online, websites must now receive two of the following three categories of additional validation:
- Something the customer knows (e.g., password or PIN)
- Something the customer has (e.g., phone or hardware token)
- Something the customer is (e.g., fingerprint or face recognition)
These additional validation steps will be a hard requirement by banks from 14th September 2019. Payments that do not meet the additional validations will be declined. Therefore, it is imperative that all websites that meet the criteria, update their payment processing to receive the additional validation.
It is worth noting that SCA will likely be enforced in the UK, regardless of the results of Brexit: https://www.fca.org.uk/publications/consultation-papers/cp18-44-brexit-regulatory-technical-standards-strong-customer-authentication
We are currently investigating the impact of implementing SCA on our client’s existing projects and researching how we can ensure this has a minimal impact on their conversion rates.
We are also aggregating our knowledge to share within our community to help reduce the burden of SCA.
We are currently waiting for clarification on the impact for subscriptions that offer a free trial; this is still being discussed by banks, with confirmation expected by 1st July 2019.
As a company, we will continue to research the implications of SCA and are preparing our team to swiftly resolve any SCA issues you may face.
In July 2019, we will be holding a free SCA workshop event in Southampton , presenting more of the finer details of the regulations and making you aware of any actions you will need to take.
We also hope to help answer any questions you may have.
Additional details about the event will follow in due course.
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