What does Strong Customer Authentication mean for accepting card payments?
Improving customer safety when making electronic payments is a major focus not just in the UK, but around the world.
In the EU and the UK, this is being introduced in the form of Strong Customer Authentication (SCA), which aims to add additional layers of security and protect customers.
But, what exactly is SCA, how will it protect customers and what does it mean for vendors?
That’s what we’ll discuss in this article.
What is Strong Customer Authentication?
Strong Customer Authentication forms part of the EU’s second Payment Services Directive (PSD2) which will improve customer safety by adding additional security measures onto electronic payments.
Although this is an EU directive, it will be adopted by the UK.
SCA requires banks to make extra checks when an electronic payment is made to confirm the customer’s identification, ensuring it’s them trying to pay.
As part of the checks, customers could be asked to provide a number of forms of identification during checkout, which could include a combination of:
- A password or PIN number
- A one-time passcode on a mobile device
- Biometric data like a fingerprint or facial recognition
What does this mean for payments?
From a business perspective you should upgrade your card payment machine if required to ensure payments can be compliant with SCA.
This already happens instore when customers will be asked to confirm their PIN number on occasion when trying to make contactless payments.
The main changes will likely be when customers are making online payments, as these ‘card not present’ transactions are deemed to be the most risky for customers.
This is because the customer and their card aren’t present when they pay.
As part of the upgraded security, you should ensure your website incorporates 3D Secure.
3D Secure automatically asks customers to complete an additional verification step when buying online, and ensures you as the vendor remain compliant with SCA.
It also ensures transactions remain easy and smooth for customers while adding the additional security you need.
If the customer is unable to pass the additional security checks, the payment may be declined.
3D Secure also moves the liability for fraudulent or disputed payments away from you as the vendor, and onto the card issuer, meaning you won’t have to worry about losing payments that turn out to be fraudulent.
If a 3D secure payment goes through and is then later disputed by the customer, the dispute will be handled by the card issuer and totally dealt with on their end - so you don’t have to worry about it because you’ve completed all the stages you had to.
Keeping your business and payments secure
As a business you have a responsibility to provide an environment for your customers to make payments in a way that’s not only easy and convenient, but safe and secure.
Strong Customer Authentication and new safety measures like 3D Secure not only provide confidence to your customers that you take their security seriously, but can also protect your own business from problems with disputed payments and potential fines when it comes to data security.
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