Strong Customer Authentication (SCA), What is it and how does it affect your business?

Update 13/08/2019

Strong Customer Authentication requirements take effect on 14 September 2019.

However, European Banking Authority published new guidelines suggesting that regulators postpone SCA.

There has been no official statement from the UK’s regulators and we still expect first banks to start declining payments which do not align with the SCA rules.

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

What is SCA?

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: Read here

What is Steadfast Collective doing to reduce the impact of SCA?

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.

What steps do Steadfast Collective plan to undertake next?

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.

You can get tickets to our SCA event here.