What is it and how to achieve it
Strong customer authentication is part of the revised Payment Services Directive (or PSD2), a package of measures introduced by European regulators, to help make online banking and payments more secure.
From 31 December 2020 in the EU (and 14 September 2021 in the UK), every electronic transaction will require strong customer authentication, except in a very few cases.
The changes will impact everyone: consumers, those who accept electronic payments, and those who provide payment and banking services in Europe and the UK.
Something the payer knows
Password, Pin memorable information
Something the payer has
Pre-registered mobile phone, card reader, token
Something the payer is
Fingerprint, iris scan, facial recognition
The new strong customer authentication requirements are a significant change to the current e-commerce model for card payments.
From 2021 strong customer authentication will be compulsory for every e-commerce transaction, unless an exemption applies. Secondly, the responsibility for authenticating customers will sit with service providers
(issuers and acquirers in the case of card payments), not merchants.
Cardholders may be asked for additional information when they make a card payment online.
If the nature of the transaction is deemed as low risk by the card’s issuer, such as you always order a takeaway via the same company, on the same device, using the same card at regular intervals) then there will be no request for additional information – this is referred to as “frictionless flow”.
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