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Posted January 13, 2021 by FreedomPay

Next Level Security: PSD2 SCA

As directed by the European Banking Authority (EBA), with the exception of the UK, from 1st January 2021 Strong Customer Authentication (SCA) will be mandatory for contactless and electronic payments made within the European Economic Area. For the UK, enforcement will come into effect beginning on 14 September 2021. To avoid future requests for payment authorisations being declined, these deadlines must be met by any business accepting or processing payments.

What is SCA and 2FA?

Strong Customer Authentication (SCA) is a legal requirement defined in the Payments Services Directive version 2 designed to help protect consumer accounts and reduce payment fraud. Customers making purchases will need to provide additional forms of identification, a process known as Two-Factor Authentication (2FA). SCA requires authentication to use at least two of the following three elements:

  • Something you know (ex: password or PIN)
  • Something you have (ex: one-time password sent to your mobile device)
  • Something you are (ex: fingerprint or face recognition)

Are All My Sales Transactions Affected?

Whilst the new legislation identifies certain transactions as exempt from these new rules, changes to the way in which exemptions will be treated, may lead to a request for additional authentication which if not satisfied, will be declined. Contactless payments, online commerce and merchant initiated transactions such as those that use card information stored ‘on-file’ are all within scope.

How Can FreedomPay Help You Meet These Requirements?

Merchants can be reassured that in working with FreedomPay we will advise you on your options to help you comply with SCA legislation and will help guide you through sector specific best business practice in mitigating the impacts of SCA.

  • If you’re a retailer or quick service restaurant and it’s the latest SCA compliant contactless EPOS or MPOS payment solution you need, then FreedomPay’s solutions come SC ready ‘out of the box’.
  • If you’re operating one or more shopping websites, FreedomPay’s fully integrated 3D Secure and Fraud Management solutions will enable you to ensure that any step-up authentication challenges are met and the maximum number of transactions, authorized.
  • If you’re operating payments based on cardholder credentials held on file, then you can be assured that FreedomPay can securely deliver the data required to meet the authentication standards.
  • If you’re in the Hotel & Travel sector, FreedomPay has one of the largest hotel merchant portfolios in the world and can help you configure our payment solution to your specific use cases.

To learn more about the requirements of SCA and how FreedomPay can help, download our FAQ.

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