How to minimise potential disruption with PSD2

How to minimise potential disruption with PSD2

Learn how to avoid unnecessary problems for customers, and instead improve conversions.

The PSD2 deadline of September 14th has passed, but some e-commerce companies still have time to implement SCA for online card transactions (possibly up to 14 March 2021). As such, for those who still need to implement SCA, all of the information below still applies. 

Soon new rules will apply, that affect the way banks and other payment services providers authenticate a person trying to make a payment (or access their account). 

The new requirements, known as Strong Customer Authentication (SCA) are being put in place to reduce fraud and make online payments more secure, and require at least two of the following:

  1. KNOWLEDGE. Something the customer KNOWS (e.g. password or pin)
  2. POSSESSION. Something the customer HAS (e.g. phone)
  3. INHERENCE. Something the customer IS (e.g. face recognition)

Unless an exemption applies (e.g. payment under €30) then SCA applies when a payer:

  • initiates an electronic payment transaction
  • accesses their payment account online
  • carries out any action remotely that may imply a risk of payment fraud

Companies will have to embed SCA solutions that work for all groups of customers. This means they may need to provide several different methods of authentication for customers. This includes methods that do not rely on mobile phones to cater for consumers who will not have, or are unable to use a mobile phone.

Minimising disruption to customers 

The Financial Conduct Authority has stated it wants “firms to implement SCA in a way that minimises disruption to, and ensures good outcomes for customers.” 

As such the FCA is giving some firms extra time to implement SCA, to enable minimal disruption for customers. E-commerce firms are encouraged to speak to their trade association and UK Finance to get more information, but are encouraging firms to coordinate implementation of SCA in line with the plan as soon as possible. 

Meanwhile in some instances online banks firms will have until 14 March 2020 to implement SCA for online banking.


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