The Revised Payment Services Directive (PSD2) and its broader Strong Customer Authentication (SCA) requirements continue to drive conversations across Europe within the e-commerce and digital payment industries.
A preliminary delay to the implementation of the SCA component of PSD2 was originally reported in August 2019, for the UK. This delay was directed by the UK’s Financial Conduct Authority (FCA) and provided UK merchants an 18-month delay to the introduction of SCA requirements.
So, What’s the Latest?
Individual EU member state regulatory authorities have announced various delays to the enforcement and migration deadlines for the SCA component of PSD2. On October 16, the European Banking Authority (EBA) issued an Opinion on announcements regarding those deadlines and supervisory flexibility. In effect, the EBA has recommended to EU member state regulators that they advise the market that all migration plans for SCA be completed by December 31, 2020, and that merchants and payment service providers (PSPs) should be able to run SCA in production as of that date.
While each member state regulatory authority will establish its own enforcement timeline, businesses affected by PSD2 should consider this EBA Opinion to be a forceful reminder that SCA will not be indefinitely postponed.
What Should Merchants Be Doing?
Regardless of the delay, businesses across the EU should make fraud prevention and compliance efforts a priority. Forter’s latest Fraud Attack Index reports a rising sophistication in the efforts of fraudsters as they attempt to circumvent detection methods. This means that, in the time leading up to SCA enforcement, fraudsters will continue to find ways to outsmart systems and look for new vulnerabilities and avenues for fraud.
It is vital that merchants across the EU ensure that they have a strategy in place that considers PSD2 and SCA requirements long before enforcement begins. The EBA Opinion confirms that merchants and PSPs must continue to prioritize SCA implementation efforts in order to meet the aggressive deadlines set out by regulatory authorities, and to stay one step ahead of the efforts of opportunistic fraudsters.
Stay up to date with all the latest PSD2 and SCA news and reach out to us at [email protected] for more details about how to prepare for SCA requirements and how Forter’s PSD2 Solution for Merchants can help your business.