By 2022, the number is expected to rise to €100bn. It is a catalyst for disruption of the payments ecosystem by technologically-advanced and consumer-friendly service providers, and its scope is broader than ever. Something that only the customer knows Password or PIN that is known only to the. So once PSD2 is live, how can you reduce customer friction? Merchants should strive to receive as many SCA exemptions as possible. PSD2 Security directives and regulations are written at a high level and the detailed implementation is being left to the industry. PSD2 (Revised Payment Services Directive) sets up common standards across the EU and highlights the importance of security by enabling a safe open banking experience. If an SCA-required payment does not meet certain criteria, it may be declined by the bank. Learn more about SCA at RetailEXPO Attending the RetailEXPO at London’s Olympia on 1 & 2 May is a great opportunity to learn more about these new SCA requirements. Though the majority of the provisions relating to the revised EU Payment Services Directive (PSD2) came into force in the UK on 13 January 2018, the regulatory technical standards (RTS) and strong customer authentication measures (SCA) will come into force on 14 September 2019. Your location, however, is based on the location of the acquirer used to process the transaction. One of the new requirements of PSD2 is known as Strong Customer Authentication (SCA). 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). The SCA mandate could cost them more than $75 billion in sales, especially as fraud protection becomes more critical than ever and PSD2 creates more transparency in the banking world. SCA itself also needs to be secure, so that its elements: − cannot be disclosed (i. As a consequence, banks could offer Open Banking APIs to Third-Party Providers (TPPs) without SCA. SCA and 3D Secure 2. RTS on SCA and Secure Communication as amended by the European Commission How to evaluate if certain information should be classified as a sensitive payment? PSPs should use monitoring mechanisms to detect unauthorized transactions and fraud (under Art. Strong Customer Authentication (SCA) for PSD2 APIs What type is the most suitable SCA for your application and API?. It’s not too late, though, which is why I titled this blog post “Just in time”. The second Payment Services Directive (PSD2) was enacted September 14, 2019. The last deadline for PSD2 was for Strong Customer Authentication (SCA) which came into effect on September 14, 2019. PSD2: Strong Customer Authentication, Changes to Online Banking | AIB. 5 Things You Need To Know About PSD2 - Payment Services Directive - SEPA Payments info helping corporates navigate payments technology & industry trends. This EBF web page presents links to relevant PSD2 websites of EU institutions and by national banking associations that are a member of the EBF. PSD2, SCA and liability shift; EBAs ‘understanding’ challenged! december 5, 2016 Finance en Control Laat een reactie achter 2,443 Bekeken In August of this year, the European Banking Authority (EBA) published the draft of the Regulatory Technical Standards (RTS) specifying – amongst others – the requirements on Strong Customer. Also with PSD2 comes stronger identity verification during online payments. The second Payment Services Directive (PSD2) and the Regulatory Technical Standards (RTS) were voted in to adapt the European regulatory landscape to the evolving payment industry. PSD2 is an EU directive that is being implemented to revise the payments process in the EU. You will find the topic being covered at the Payments Stage in an informative panel discussion and by payment suppliers on the exhibit floor. The PSD2 RTS are a set of guidelines published by the EBA defining how the market participants are expected to implement PSD2. If an SCA-required payment does not meet certain criteria, it may be declined by the bank. Tighten Up on Credit Card Security: From PSD to PSD2 to GDPR, Now SCA. Strong Customer Authentication (SCA), Secured Communication, Risk Management and Transaction Risk Analysis (TRA) - have been maintained, confirming the directive's security objectives. Under PSD2, merchants will be required to use SCA on applicable transactions when executing a payment. So, the main impact of PSD2 and SCA will be on credit card transactions. Main changes brought by PSD2? –Acknowledgement of new players accessing the customers' payment accounts –An increased security of Internet payments using Strong Customer Authentication (SCA) –A broader geographical reach Effective in the European Economic Area (EEA): 31 = 28 Member States + Iceland, Liechtenstein and Norway The objectives. The PSD2 text introduces strict security requirements for the initiation of electronic payments in order to reduce the risk of fraud. Missed deadline could lead to declined payments. PSD2 Toinen maksupalveludirektiivi – Payment Services Directive, PSD2 Sääntelyn tavoite ja kansallinen täytäntöönpano. Instead of banking on exceptions, retailers should fix the problems that don’t protect their customers’ payment information and provide a better defence against fraudulent actors. This is the title given to a security system that, as its name suggests, relies on two stages, not just the password alone. Although the legal deadline for compliance with this rule is set for September 14, some UK firms may be allowed additional time on a case-by-case basis. It is a key mandate included in the PSD2 within EEA that requires electronic payments initiated by the buyer to be authenticated by at least two independent factors. The question is whether the SCA will damage customer experience. The go-ahead for open application. Beginning September 14, 2019, European Union rules regarding “Strong Customer Authentication” (SCA), part of PSD2, kick in. Introduction. Payment Service User (PSU) consent, with the use of a mobile device, is directly linked to the content. With the date of enforcement (14 September 2019) coming up quickly, financial institutions need to continue to take the necessary steps to accelerate their PSD2 strategy. ie: This website uses cookies to improve your browsing experience and provide advertising which we believe might be of interest to you. com Page 7 Are there any downsides to activating 3D Secure v1? 3D Secure v1 ensures a more secure transaction reducing the likelihood of chargebacks. SCA is part of the PSD2, which is European legislation primarily aimed at preventing online fraud as effectively as possible. Behavioral biometrics fall under inherence and is the best way to introduce strong security without customers feeling the effects in user experience. On September 14th, Strong Customer Authentication (SCA) rules will come into effect for all digital payments in Europe. The RTS for SCA is a mandatory requirement for authenticating online payments. SCA will need to be collected prior to processing a payment by authenticating two of three possible identification traits—something the customer. com Call 877. Security is for many consumers a big concern. This article considers just one of these changes: the introduction of a legal requirement for payment service providers (PSPs) to use strong customer authentication (SCA) under certain circumstances. Strong customer authentication (SCA) is a requirement of the revised EU Payment Services Directive Services (PSD2) on payment service providers within the European Economic Area. com Page 7 Are there any downsides to activating 3D Secure v1? 3D Secure v1 ensures a more secure transaction reducing the likelihood of chargebacks. While the payments industry scrambles to meet new standards for APIs, the FCA grants an extension for SCA compliance. One of the major aspects of PSD2 is the focus on improving security in the payment space by emphasizing SCA. Open Banking/API interfaces, and account access: While PSD2 does not require to open up an interface to banking mandatory, it is strongly encouraged. , Stripe) are both located in the EEA. Specifically, the PSD2 regulation that will impact businesses the most this year is Strong Customer Authentication (SCA). Breaking down barriers to growth and innovation. SCA rules imposed under the revised Payment Services Directive (PSD2) are forcing payment service providers (PSP) to reassess their relationships with merchants based on their fraud rates. PSD2 and more specifically for this article, SCA is around the corner, with few companies and people even aware of why it matters and what it stands for. 0 worldwide regulation coming into force in 2020. Strong Customer Authentication (SCA) requires anyone processing online payments to require an extra step to verify a customer's identity when they pay with credit cards or bank transfers online. 3D Secure Prepares For PSD2 SCA With Updated Specification 2. Merchants and their payment providers are encouraged to provide additional identifying information about customers to the cardholder's bank at the time of. Offering SCA capabilities - Under PSD2, SCA is the process for using multi-factor authentication during various online interactions such as account access and payment initiation. 2018 is set to be a game-changing year for retail banking as PSD2 takes effect across the EU and the European Economic Area. PSD2 implies three major changes for merchants: Increased innovation through Access to Accounts (XS2A) Enhanced security and reduced fraud through Strong Customer Authentication (SCA) Improved consumer trust as a result of banned surcharging; 1. An online transaction will be defined as having gone through SCA, if at least two of the following three factors have been provided by the consumer:. 0 solution will soften the blow. It is the result of an expansion of regulatory requirements from the EU Commission governing payments in Europe, and has been transposed into local legislation by the individual EU member states. PSD2: Introduction to SCA PSD2 is the second Payment Services Directive designed by the European Union. One of the more significant impacts of PSD2 relates to eCommerce transactions and the need to implement Strong Customer Authentication (SCA). SCA, a key plank of PSD2, has been designed to combat this very trend, and dramatically reduce the volume of fraudulent payments. PSD2 Toinen maksupalveludirektiivi – Payment Services Directive, PSD2 Sääntelyn tavoite ja kansallinen täytäntöönpano. PSD2 gives us the perfect opportunity to look at how we accept cards. One of the most impactful aspects of PSD2’s implementation will be on consumer experience. To summarize, the SCA mostly refers to adjustments that will be made by payment service providers. That means, for example, that a valid consent-id is not required to list or view accounts, but the field itself is. Readiness for PSD2: APIs Fall Short, but More Time for SCA By Latham & Watkins LLP on August 23, 2019 Posted in Digital, Payments. Consequences of not being PSD2 SCA compliant. These new requirements are part of the revised Payment Services Directive (PSD2) regulations and mandate that additional authentication measures be performed on certain electronic transactions. Now it’s been two years since the first announcement so we have updated the information here with. PSD2 is a new European Economic Area (EEA) regulation that requires Strong Customer Authentication (SCA) as a means to increase security and authorization rates while decreasing online payment fraud. However, they should still attempt SCA for all transactions. The European Banking Authority (EBA) recently published the long-awaited (and much debated) draft Regulatory Technical Standards (RTS) covering Strong Customer Authentication (SCA) and secure communication. Simility can help you avoid SCA requirements for PSD2, while reducing fraud and improving customer satisfaction. Impacted businesses that don't prepare for these new requirements, or that only rely on 3DS2 to conduct SCA, will see their conversion rates significantly drop after the enforcement of SCA. SCA is defined as authentication through at least two of the following factors: something you know, something you have, and/or something you are. 09/10/2019; 2 minutes to read; In this article. Traditional OTPs (such as OTP by way of SMS) do not comply with the current state of the RTS on SCA and CSC, as they do not support the dynamic linking necessity. Strong customer authentication (SCA) is a requirement of the revised EU Payment Services Directive Services (PSD2) on payment service providers within the European Economic Area. Breaking down barriers to growth and innovation. Additional documentation for PSD2 and SCA is now available on our Knowledge Center. They are expected to apply from September 2019. The regulation impacts certain electronic payments where both the issuer and acquirer are located in the EEA (European Economic Area). The changes introduced by PSD2 will deeply affect ecommerce in the EEA. Merchants and their payment providers are encouraged to provide additional identifying information about customers to the cardholder's bank at the time of. 2, a new version that takes advantage of Europe's Second Payment Services Directive (PSD2) exemptions for Strong Consumer Authentication while also enabling operation even when the cardholder is offline. Although consumers will see tremendous benefit. PSD2 does not provide for any general exemption from the application of SCA for corporate users (though the relevant liability provisions are subject to corporate opt-out). Figures from the European Central Bank show that card-not-present fraud – a term that refers broadly to cases of online payment deceit – is now the most prominent type of card fraud across Europe. SCA Authentication only: One-off SCA for multiple providers. worldfirst. PSD2 aims, among other objectives, to make e-commerce safer. With Antelop’s secure SDK, we make PSD2 compliancy authentication easy to deploy for banks and convenient to use for your customers. Once in effect, SCA requires that online payment processors build additional authentication when accepting credit/debit card payments. This will drive the best customer experience in combination with regulatory compliance. PSD2, the second Payment Services Directive, was established to benefit consumers by driving payment innovation and data security. PSD2 regulates the provision of new payment services which require access to the payment service user´s data. In this article, we will discuss one aspect of PSD2 that has a direct impact on merchants: Strong Customer Authentication (SCA) for payments. With the deadline of 14 September tomorrow, Charley Brooke Barnett, digital editor of The Fintech Times, spoke with David Gardner, partner at TLT, to explore the implications of the new regulations. It is a European directive that comes into force on September 14th 2019. Twenty months after the EBA issued the first draft, on 13 March the regulatory technical standard (RTS) on strong customer authentication (SCA) and Common Secure Communication (CSC) under revised Payment Services Directive (PSD2) was finally published in the Official Journal of the European Union. An important element of SCA is two-factor authentication. On 13th March, 2018 Regulatory Technical Standards (RTS) on strong customer authentication (SCA) and common and secure communication (CSC) under PSD2, were published in the Official. Related: 14 August 2019: Counting down to the full implementation of PSD2. During the online purchase, SCA is used to determine the identity of the customer and authentication is carried out using two factors. Open Bank Project PSD2 Suite enables financial institutions to securely and rapidly comply with PSD2. Register now to watch the replay. PSD2 and particularly the SCA aspect has the potential to dramatically change not just. How Chargebee helps you get SCA ready. The RTS set out. The availability of 3-D Secure version 2. SCA, a key element of PSD2, will require merchants to introduce two-factor authentication for transactions with a value of over €30, forcing customers to take extra steps to prove their identity. To this end, PSD2 requires strong customer authentication (SCA) for electronic payments. Anonymous transactions on pre-paid cards aren't subject to the SCA mandate. Within the following diagram: - Actors have cyan-coloured labels. RTS on SCA and Secure Communication as amended by the European Commission How to evaluate if certain information should be classified as a sensitive payment? PSPs should use monitoring mechanisms to detect unauthorized transactions and fraud (under Art. The infographic also gives a timely update on the current status of PSD2 and the RTS rules. In light of the EBA's decision to grant individual countries the ability to request an extension to the September 14 deadline for SCA compliance, Zuora is continuing to develop integrations to the gateways as discussed in the July 2019. Equally important, TPSPs will be regulated – they will have to obtain a license and set up new frameworks in order to establish strong customer authentication (SCA) procedures. SCA is gradually becoming mandatory as of 14 September as part of the PSD2. The SCA regulation will apply to customer-initiated online transactions where both the business and the cardholder's bank are located in the EEA. Here are the reasons why SCA is a necessary next step: · Increased online shopping - According to a recent survey, 25% of Europeans with Internet access shopped online at least once a week in 2016. And 2FA, along with risk assessment tools, can help reduce online fraud. fend off the SCA mechanism for card payments — because their bank no longer has a free choice on whether or not to perform SCA. One example of SCA is two-factor authentication. PSD2 / SCA Hello, I am using Billing Plans API for managing subscription and Payments API for one-time payments in my website. Within the following diagram: - Actors have cyan-coloured labels. The SCA comes with two forms of authentication which should be provided by the customer for the payment to be validated by the issuing banks. RTS Requirements for PSD2 Compliance. 0, check out this post. PSD2 means that payment service providers will be required to use strong customer authentication (SCA) to secure more transactions. OBLY (OpenBanking-ly) is our Payment Services Directive (PSD2) Compliance product built to Regulatory Technical Standards. PSD2 and particularly the SCA aspect has the potential to dramatically change not just. This signifies the dawn of open banking, where a whole new host of financial products and. One of the major revisions in PSD2 is the introduction of Strong Customer Authentication (SCA). PSD2 is the second Payment Services Directive, designed by the countries of the European Union. It is the result of an expansion of regulatory requirements from the EU Commission governing payments in Europe, and has been transposed into local legislation by the individual EU member states. Open Banking Europe (OBE) is a PRETA initiative launched in June 2017 with the aim of fostering innovation, competition and efficiency to increase consumer choice and enhance security for online payments in the EU. carries out any action through a remote channel which implies a risk of payment fraud. ) Is PayPal PSD2 compliant?. and other countries and an unregistered trademark elsewhere. In most European countries, starting 14 September 2019, a Strong Customer Authentication (SCA) solution will be required for all digital transactions, as part of PSD2. 2, a new version that takes advantage of Europe’s Second Payment Services Directive (PSD2) exemptions for Strong Consumer Authentication while also enabling operation even when the cardholder is offline. Strong Customer Authentication (SCA), Secured Communication, Risk Management and Transaction Risk Analysis (TRA) – have been maintained, confirming the directive's security objectives. You can’t get access to banking data that easy and PSD2 regulations have strict access policies and ways to authenticate a person. The European Banking Authority (EBA) published today an Opinion on the elements of strong customer authentication (SCA) under the revised Payment Services Directive (PSD2). Request fields. Thank you for your interest in Daon’s 5 Simple Rules for PSD2 SCA Success. A new standard called 3DS2 (3D Secure 2. Starting on September 14, 2019, any online purchase within the EEA must go through the two-factor authentication system. As of September 14, 2019, merchants will have to adapt to SCA, which aims to increase payment security and protect sensitive consumer payment data. For many banks, PSD2 will be their first experience of exposing Open APIs. This requirement dictates that consumers must authenticate using additional parameters. Open Banking Europe (OBE) is a PRETA initiative launched in June 2017 with the aim of fostering innovation, competition and efficiency to increase consumer choice and enhance security for online payments in the EU. SCA means most payments conducted via an electronic channel must be authenticated using two-factor authentication: a combination of something you know (password); something you have (a device or security token); or something you are (fingerprint). Twenty months after the EBA issued the first draft, on 13 March the regulatory technical standard (RTS) on strong customer authentication (SCA) and Common Secure Communication (CSC) under revised Payment Services Directive (PSD2) was finally published in the Official Journal of the European Union. There are exemptions for certain types of payment, such as some smaller and repeating payments. How to upgrade paypal payment gateway integration to support Strong Customer Authentication (SCA) and PSD2. RTS on SCA and Secure Communication as amended by the European Commission How to evaluate if certain information should be classified as a sensitive payment? PSPs should use monitoring mechanisms to detect unauthorized transactions and fraud (under Art. One of the more significant impacts of PSD2 relates to eCommerce transactions and the need to implement Strong Customer Authentication (SCA). While PSD2 officially came into effect on 13 January 2018, the regulations on SCA did not enter the Official Journal of the EU until 13 March 2018 and will not be enforced for a further 18 months after this date - coming into effect on 14 September 2019. The go-ahead for open application. This verification requires multi-factor authentication to help ensure your online purchases are secure and protected. 3DS — Three-Domain Secure is used as a method of authentication for online transactions and verify the identity of the person trying to make the online payment. One of the key elements of PSD2 is that it mandates compliance with Strong Consumer Authentication standards. Open Bank Project PSD2 Suite enables financial institutions to securely and rapidly comply with PSD2. A PSD2 actor is either an entity or a physical person which can endorse one or several roles. The directive itself covers a wide scope around payments and will. From 14 September 2019, a new European directive (PSD2), aimed at making online payments safer, requiring Strong Customer Authentication (SCA), will be in force across the European Economic Area. Strong Customer Authentication. By Diana Hoffman, director, product marketing. SCA mandates the customers to use two or more of the following elements to transact. The European Banking Authority (EBA) has published an Opinion on the elements of strong customer authentication (SCA) under the revised Payment Services Directive (PSD2). The go-ahead for open application. A couple of weeks ago the European Payments Council (EPC) released a pretty interesting infographic which covers some complex terms such as RTS, SCA, CSC - all of which are key components of PSD2. Related: 14 August 2019: Counting down to the full implementation of PSD2. The requirements to evolve from 'screen scraping' to Secure Customer Authentication will force a rising tide that floats all boats for Open Banking. Jonathan Jensen is Director for Identity Verification at GBG, the global specialist in identity data intelligence. It can be used by any financial institution interested in being compliant with the SCA requirements. 2 Description EMVCo has issued a press release announcing 3D Secure 2. Strong Customer Authentication (SCA) is a new European regulatory requirement to reduce fraud and make online payments more secure. If an SCA-required payment does not meet certain criteria, it may be declined by the bank. SCA will need to be collected prior to processing a payment by authenticating two of three possible identification traits—something the customer. SCA: friend or foe? One of the main goals of PSD2 is to encourage issuers to protect their cardholders from fraud – primarily by sending orders through Strong Customer Authentication (SCA). PSD2: An introduction to Strong Customer Authentication (SCA) August 2, 2019 With the volume of payments being processed skyrocketing, the risk of fraudulent behavior is increasing simultaneously. The revised Payment Services Directive (PSD2) is the EU legislation which sets regulatory requirements for firms that provide payment services. We continue to take security and fraud prevention seriously, and GoCardless' Risk and Product teams are committed to getting the balance between conversion and security right for our. This is the second of a three-part series of posts detailing PSD2: Strong Customer Authentication in the EU (SCA). The EBA's Opinion allows additional time to implement the SCA requirements but does not allow additional time to implement Open Banking APIs, the other pillar of PSD2. PSD2: Everything you need to know about strong customer authentication (SCA) PSD2 enables strong customer authentication in all European economic areas. Merchants, acquirers, card issuers and customers now face a new challenge in the landscape. SCA standards enable merchants, acquirers and issuers to clearly. The second Payment Services Directive (PSD2) and the Regulatory Technical Standards (RTS) were voted in to adapt the European regulatory landscape to the evolving payment industry. Tighten Up on Credit Card Security: From PSD to PSD2 to GDPR, Now SCA. To this end, PSD2 requires strong customer authentication (SCA) for electronic payments. 9 January 2019. What is Strong Customer Authentication? Strong Customer Authentication (SCA) is a new European regulatory requirement to reduce fraud and make online payments more secure. Or do they all use the same API? Yes, the technical APIs for the different services are not exactly the same. The SCA requirements and third-party access framework came in to force in September 2019, however the deadline for SCA compliance has been delayed by 18 months. In short, the Directive states that banks need to offer payment APIs to third party-providers of financial services, also known as TPPs (Third Party Provider) under the XS2A (Access to account) rule. Overall, the new regulation creates more security in the online world and that's definitely welcome!. 2 Description EMVCo has issued a press release announcing 3D Secure 2. More than two years after the European Banking Authority (EBA) started to work on their principles and following the publication by the European Commission of a final version in November 2017, the Regulatory Technical Standards (RTS) on strong customer authentication (SCA) and secure open standards of communication (CSC) are published today in the Official Journal of the European Union. 0) The introduction of the new EU PSD2 directive is going to change the processes involved in making payments online. An important element of SCA is two-factor authentication. Directive of the European Parliament and of the Council (EU) No. SCA Solution for PSD2 WHAT ARE PSD2 AND SCA? The 2nd Payment Services Directive (PSD2) was established by the European Banking Authority (EBA) to drive payment innovation and data security by reducing competitive barriers, mandating new security processes and encouraging standardized technology. PSD2 mandates a high level of security (Strong Customer Authentication, or SCA) in payment services, especially for online and mobile (card-not-present) payments. As the authors of this post explained in a May 2019 post, PSD2’s regulatory technical standards on SCA are set to come into force on 14 September 2019. SCA will need to be collected prior to processing a payment by authenticating two of three possible identification traits—something the customer. In this section, you can find announcements and information concerning the implementation of PSD2 in Greece. On 21 June 2019 the EBA published an opinion on the elements of strong customer authentication. Article 6 of the SCA RTS adds the pre-requisite that PSPs must mitigate the risk that the knowledge element is “uncovered by, or disclosed to unauthorized parties” and have mitigation measures in place “in order to prevent their disclosure to unauthorized parties. Requirements for authenticating online payments are to Read more. As of September 14, 2019, banks in the 31 countries of the European Economic Area are required to verify the identity of the person making an online purchase before the payment is processed. PSD2’s focus is to protect consumers across all payment types and create a more open, competitive payments landscape across Europe. The revised Payment Services Directive (PSD2) is the EU legislation which sets regulatory requirements for firms that provide payment services. To summarize, the SCA mostly refers to adjustments that will be made by payment service providers. Since the new authentication regulations under PSD2 have been enforced, we’ve seen some change in the proportion of payments requiring Strong Customer Authentication (SCA). And, there may be exemptions granted by the. The infographic also gives a timely update on the current status of PSD2 and the RTS rules. SCA: Strong Customer Authentication Under PSD2 The most important component or change for user identification coming with PSD2 is the requirement of Strong Customer Authentication. PSD2 and SCA for ecommerce are coming. 0 as standard - a best practice way to collect Strong Customer Authentication (SCA). PSD2, Security, and the Consumer Experience. To summarize, the SCA mostly refers to adjustments that will be made by payment service providers. Consequences of not being PSD2 SCA compliant. This article considers just one of these changes: the introduction of a legal requirement for payment service providers (PSPs) to use strong customer authentication (SCA) under certain circumstances. So, what is Strong Customer Authentication (SCA)? Strong Customer Authentication (SCA) is a new European regulatory requirement aiming to increase fraud prevention and heighten security for online payments. Here is a checklist to help you get PSD2 ready with Chargebee. SCA stands for Strong Customer Authentication and is sometimes referred to as 'Two Factor Authentication'. carries out any action through a remote channel which implies a risk of payment fraud. There will be a small amount of transactions which will be exempt from the new PSD2 regulations regarding SCA. Although consumers will see tremendous benefit. PSD2 is a revision of the regulations set out in the original PSD, which established a single market for payments with a view to creating a more efficient and secure service. Register now to watch the replay. The regulation impacts certain electronic payments where both the issuer and acquirer are located in the EEA (European Economic Area). We hope that, in learning about how PSD2 defines SCA and what exemptions are available, you’ll be able to approach the regulation changes confidently and in the knowledge that we’ve got your back. On 14 September 2019, the Strong Customer Authentication (SCA) portion of the Revised Payment Services Directive (PSD2) goes into effect. Main changes brought by PSD2? -Acknowledgement of new players accessing the customers' payment accounts -An increased security of Internet payments using Strong Customer Authentication (SCA) -A broader geographical reach Effective in the European Economic Area (EEA): 31 = 28 Member States + Iceland, Liechtenstein and Norway The objectives. First Name *. You can set up SCA using (2FA) Two Factor Authentication. PSD2 recognizes that not all online payments carry the same risk factor and for some use cases, SCA requirement is simply not possible because the cardholder will never be present for authentication. On 14 September 2019, the Strong Customer Authentication (SCA) portion of the Revised Payment Services Directive (PSD2) goes into effect. Payment providers must use two separate authentication elements to verify an online transaction. The core objectives of Payment Services Directive (PSD2) included enhancing the security of payments and limiting fraudulent transactions. March 2000: Lisbon Agenda to make Europe "the world's most competitive and dynamic knowledge-driven economy" by 2010. As soon as Datatrans has this information, we will let you know. SCA, a key plank of PSD2, has been designed to combat this very trend, and dramatically reduce the volume of fraudulent payments. 2 According to Article 40(30) PSD2 SCA is an “authentication based on the use of two or more elements categorised as knowledge (something only the user knows), possession (something only the user possesses) and inherence (something the user is) that are independent, in that the breach of one does not compromise the reliability of the others, and is designed in such a way as to protect the confidentiality of the authentication data". Overall, the new regulation creates more security in the online world and that’s definitely welcome!. The European Union’s revised Payment Services Directive has already come into force, which now means that cardholders will occasionally be prompted for their PIN – even for low-value contactless purchases. Technology approved by the Bureau of SRC, Germany. User-centric design and early user testing are key for user acceptance and broad adoption of SCA. It is a European directive that comes into force on September 14th 2019. The European Commission introduced the Payment Services Directive 2 (PSD2) to make payments safer, increase consumer protection and to foster innovation and competition. PSD2 SCA is a complex set of regulations, but it can be implemented to meet today’s authentication challenges and options and protect all parties involved. The EU’s second Payments Services Directive (PSD2) has kept banks, payments services providers, consultants, lawyers and conference organisers busy over recent months. Sign up to access the Visa PSD2 SCA Implementation Guide. On November 27 the European Commission published the final version of the PSD2 RTS on SCA and CSC (Regulatory Technical Standard on Strong Customer Authentication and Common and Secure open standards of Communication), the most crucial element ASPSPs and fintechs. Equally important, TPSPs will be regulated – they will have to obtain a license and set up new frameworks in order to establish strong customer authentication (SCA) procedures. The EBA's Opinion allows additional time to implement the SCA requirements but does not allow additional time to implement Open Banking APIs, the other pillar of PSD2. RTS on SCA and Secure Communication as amended by the European Commission How to evaluate if certain information should be classified as a sensitive payment? PSPs should use monitoring mechanisms to detect unauthorized transactions and fraud (under Art. The SCA mandate could cost them more than $75 billion in sales, especially as fraud protection becomes more critical than ever and PSD2 creates more transparency in the banking world. So while the RTS defines exemptions that are available for consideration, it’s ultimately up to the issuing banks to decide whether to accept an exemption request or require SCA on a transaction. Additional documentation for PSD2 and SCA is now available on our Knowledge Center. PSD2: An introduction to Strong Customer Authentication (SCA) August 2, 2019 With the volume of payments being processed skyrocketing, the risk of fraudulent behavior is increasing simultaneously. But it’s not as simple as just implementing something like Apple Face ID within their app – as they still need to properly comply with SCA, Dynamic Linking and Risk Assessment requirements. Unsurprisingly, the knowledge element of SCA is defined in PSD2 as ‘something only the user knows. PSD2’s new SCA (Secure Customer Authentication) requirement will have a big impact on the way merchants take payments from customers. Requirements for authenticating online payments are to Read more. An important element of SCA is two-factor authentication. The requirement to perform SCA comes into effect on 14 September 2019. and other countries and an unregistered trademark elsewhere. SHARE Please print. Major Implications: PSD2 increases authentication requirements &. This is because not all cardholders are enrolled in compliant authentication solutions, and most online merchants are currently unable to request SCA. 3DS can dramatically reduce fraud and increase authorization approvals and is one of the primary ways for Payment Services Providers to comply with the SCA mandate. When will PSD2 be enforced? We anticipate that the enforcement of the SCA requirement will be phased and fragmented across Europe ( see updates by country ). It could revolutionize the payments industry, affecting everything from the way we pay online, to what information we see when making a payment. Will PSD2 and SCA Ruin Your Customer Experience? Blog: Enterprise Decision Management Blog. PSD2 is independent of 3DS 2. Payment Service User (PSU) consent, with the use of a mobile device, is directly linked to the content. In the meantime, some gateways like Stripe allow you to control whether or not SCA techniques like 3D Secure 2 are required all the time or not. 2, a new version that takes advantage of Europe's Second Payment Services Directive (PSD2) exemptions for Strong Consumer Authentication while also enabling operation even when the cardholder is offline. Given that various surveys place awareness of and readiness for PSD2 SCA on the part of merchants between 40-70%, it is not surprising to see such extensions. PSD2, along with SCA, is the third iteration to the initial directive. SCA — Strong Customer Authentication is a requirement of the PSD2 law to make online payments more secure and reduce payment fraud. Payment plugin for Stripe Checkout with support 3D Secure 2, PSD2 and SCA. The last deadline for PSD2 was for Strong Customer Authentication (SCA) which came into effect on September 14, 2019. FAQs – PSD2/SCA Changes 2 For ‘one leg out’ transactions, UK based customers may not be able to apply SCA to transactions when the card issuer isn’t located in the EEA. One of the most impactful aspects of PSD2’s implementation will be on consumer experience. PSD2 mandates a high level of security (Strong Customer Authentication, or SCA) in payment services, especially for online and mobile (card-not-present) payments. In fact, a Deloitte survey on business sentiment around PSD2 found that delivering a good user experience was the greatest challenge to meeting the SCA requirement. Figure 1: SCA authentication flow. Learn more about SCA at RetailEXPO Attending the RetailEXPO at London’s Olympia on 1 & 2 May is a great opportunity to learn more about these new SCA requirements. With the date of enforcement (14 September 2019) coming up quickly, financial institutions need to continue to take the necessary steps to accelerate their PSD2 strategy. Every EEA based issuer and acquirer is expected to comply with PSD2 and therefore SCA but remember that SCA does not mandate use of 3DS2. PSD2 primarily exists to enhance customer rights, including enhanced security through SCA [Strong Customer Authentication] criteria, increased rights for consumers to launch complaints and, crucially, the enablement of third parties to access account information allowing for new payment services to develop. PSD2 will go live from 13 th January, 2018 and will have implications for all companies in Europe that deal with payments, ranging from how to regulate the emergence of Third Party Providers (TPPs) to the need for strong customer authentication (SCA). PSD2 aims, among other objectives, to make e-commerce safer. Its main objectives are to: Contribute to a more integrated and efficient European payments market. Register now to watch the replay. The location of the consumer is determined based on the location of their issuer. The Spanish National bank has suspended the implementation of the SCA, as part of the PSD2 Directive, which had to come into force next September 14th. SCA will impact all countries within the European Economic Area (EEA). Here is a quick summary. If an SCA-required payment does not meet certain criteria, it may be declined by the bank. PSD2 requires Strong Customer Authentication (SCA) to be applied to all electronic payments within the European Economic Area (EEA). (If you want to know more about 3D Secure 2. How does this impact my events and attendees? The new EU card payment rules mean that attendee payments will require additional authentication. The final draft Regulatory Technical Standards (RTS) on Strong Customer Authentication (SCA) under the revised Payment Services Directive (PSD2) mandates that financial institutions require multi-factor authentication for certain scenarios based on transaction amount and fraud level. After the SCA RTS has been applied, it will be the only acceptable certificate for authentication of TPP Directive / PSD2 PSD2 Directive. SCA, a key element of PSD2, will require merchants to introduce two-factor authentication for transactions with a value of over €30, forcing customers to take extra steps to prove their identity. Figures from the European Central Bank show that card-not-present fraud – a term that refers broadly to cases of online payment deceit – is now the most prominent type of card fraud across Europe. With PSD2, there are issues in areas including API standards, API performance KPIs, fragmentation of SCA methods, different customer journeys, different RTS interpretations, directory services and dispute processes. There are three common factors of authentication and PSD2 defines the SCA as having to include two or more of the following:. What are SCA, PSD2, and 3D Secure? Strong Customer Authentication (SCA) is a requirement of the PSD2, the Second Payment Services Directive that establishes revised rules for payment services in the European Union. 2017 PSD2 Live Deadline for national governments to transpose PSD2 into local legislation 13 Jan. The company has recently released more than 60 PSD2 API sandboxes for banks and eWallets in countries like the UK, France, Sweden, and Spain. SCA (Strong Customer Authentication) is a new requirement that’s part of Europe’s PSD2 (second Payment Services Directive). An important element of the PSD2 is the requirement for Strong Customer Authentication (SCA) on the majority of electronic payments. These require merchants to implement additions to checkout payment flows and customer present payment terminal capabilities. Increasing customer security—PSD2 includes Strong Customer Authentication (SCA), which is an authentication process that validates the identity of the user of a payment service or a payment transaction. If you as a merchant or your payment provider does not support SCA, there is a high risk of failed payments and for losing your merchant contract with your acquirer. The infographic also gives a timely update on the current status of PSD2 and the RTS rules. Impacted businesses that don't prepare for these new requirements, or that only rely on 3DS2 to conduct SCA, will see their conversion rates significantly drop after the enforcement of SCA. Most consumers are aware of this even if they don’t know it by that name. PSD2 and its SCA applies to all forms of electronic payments, including bank and card payments, unless they fall into a small number of exemptions.