The introduction of Strong Customer Authentication

Strong Customer Authentication (SCA), a common term in the world of online payments. September 14, 2019 is the date on which this was introduced. As part of the PSD2 regulations, the introduction of SCA will also have an impact on companies that do business online. Online Payment Platform is looking at the consequences for platforms and marketplaces.


What is Strong Customer Authentication?

Strong Customer Authentication is an extra authentication step for online transactions with a value of more than €30. This extra authentication step is also called a two-factor authentication. When paying, you have to meet two conditions, namely something you own (debit card, authentication device or phone) and something you know (pin code or password) or something you are (fingerprint or face recognition). From mid-September, every online payment will have to comply with the SCA protocol.


Purpose of SCA

The aim of this heavier way of authentication when paying is to reduce the number of fraud cases. The world of internet companies continues to grow, and so does the number of fraud attempts. Thanks to the innovative developments of the FinTech companies, many cases of fraud are already detected and prevented. However, no new measures are required. The fraudsters are also becoming smarter and smarter.


Consequences of the introduction of SCA

A common concern is that the so-called seamless payment is endangered. The consequences for the introduction of SCA are noticeable for a number of payment types. For example, an extra step will be taken when paying by credit card. Many other payment methods - iDEAL and Bancontact, for example - will continue to operate as they are today, which means that not much will actually change. Let everyone, pay everyone. That's what it's all about.


Think of it as an opportunity

At the end of the day, everyone benefits from reducing the number of cases of fraud. So see it as an opportunity and look at the possibilities of continuing to optimise the user-friendliness. In short, let the payment process be as safe and seamless as possible.


Do you want to know more about PSD2 and what this means for your platform? Read our PSD2 white paper "Trading platform becomes payment institution" about the fundamental choices that marketplaces and trading platforms have to make as a result of the wide range of applications of PSD2.