Finance Monthly October 2019 Edition
www.veridiumid.com What does SCA mean for consumers? According to a survey by Avira, 30% of consumers worry whilst shopping online, and 22% only use well-known e-commerce sites in fear of being a target of bad actors. That added layer of security on online payments will enable these consumers to feel more confident when processing payments over £28 online, as the authentication checks i.e. biometrics such as fingerprint or facial recognition are far more secure. Indeed, consumers will benefit in a variety of ways from the enforcement of SCA: purchasing processes will become easier, there will be more choice of financial providers (and consequently methods of payment) and there will ultimately be a reduced risk of fraud. There will be an extra step in the payment checkout process, where customers will have to use biometric authentication or codes to approve the payment, but this should be a seamless experience and not deter consumers from shopping online. According to a recent survey, 48% of consumers have already authenticated a payment using biometrics; and 61% believe As part of the revised Payment Service Directive (PSD2) published in 2018, Strong Customer Authentication (SCA) was incorporated to make online payments more secure. The rules, which were set to be applied on September 14th, mean consumers will have to approve online payments through a second level of authorisation, if the cardholder’s bank and the business accepting the transaction are located in the European Economic Area. In other terms, when consumers make an online payment of over £28, extra levels of authentication will be required at the time of the transaction. Shoppers will have to provide two of the following: something they know, like a password, who they are, through biometrics such as fingerprint or facial scan, or receive a code through their mobile device. FCA EXTENDS PSD2 STRONG CUSTOMER AUTHENTICATION DEADLINE, PUTTING CONSUMERS AT RISK Jason Tooley, Chief Revenue Officer at Veridium and Board Member at techUK 52 www.finance-monthly.com FINANCIAL INNOVATION & FINTECH - PSD2
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