UK pushes back strong authentication for payments deadline and European industry requests extension

UK merchants have been given a little longer to implement biometrics and other authentication factors, as the strong customer authentication (SCA) rules for online payments above €30 (US$32.50) will not come into effect until September 14, 2021, due to a six-month delay announced by the UK Financial Conduct Authority and reported by Finextra.

Voices from the payments industry, including the European Payment Institutions Federation (EPIF), have called on the European Banking Authority (EBA) to delay the implementation deadline by at least six more months from its current December 31, 2020 deadline, as Finextra separately writes. The challenges imposed by the COVID-19 pandemic make it unexpectedly challenging for companies in the payment chain to put new technology in place, according to the organization, which counts Mastercard and Visa as members.

Industry bodies EuroCommerce, Independent Retail Europe, and Ecommerce Europe co-signed a letter to the EBA and the European Commission to grant a harmonized extension.

Euractiv notes that bank and credit card company association Payments Europe subsequently added its support for the letter.

European consumer organization BEUC, however, told Euractiv a delay would be “completely unacceptable.”

“Online fraud was growing even before COVID-19 and one reason is that most online transactions require only the card number, its expiry date and the three-digit code on the back of the card,” BEUC spokesperson Andrew Canning said, noting organizations have had four years to prepare already.

The SCA directive of the EU’s PSD2 regulation require two-factor authentication (2FA), and therefore payments above the threshold will be made with biometrics or a physical token in addition to a password. Before settling on its current deadline, the EBA had suggested conditions for extensions to be granted by national regulators, raising the possibility of a fragmenting European ecommerce landscape.

The UK deadline had already been pushed back to March 14, 2021. The FCA says it will take full supervisory and enforcement action once the new deadline is reached.

Worldpay Merchants Solutions, FIS SVP of Product Strategy Charles Damen said that more than 70 percent of online payments are not compliant with SCA rules.

Accertify Product Manager James Pinborough recently discussed the challenges small businesses face from the SCA implantation deadline in an email interview with Biometric Update.

Article Topics

biometric payments  |  biometrics  |  ecommerce  |  Europe  |  fraud prevention  |  identity verification  |  online authentication  |  secure transactions  |  UK