What is the impact of SCA on my platform?

Since September 14th, 2019, the section of the PSD2 legislation that deals with Strong Customer Authentication (SCA) has additionally been implemented. However, as many companies are not yet ready for SCA anyhow, the enforcement of this legislation has partly been postponed until December 31st, 2020. Online Payment Platform is looking at the consequences for platforms and marketplaces.

Purpose of SCA

The objective of PSD2 is to make payment transactions safer and more reliable. An important method of doing this is the SCA. User authentication must be strong. You can authenticate a user with three options; something you own (debit card or phone), something you know (pin code or password) and/or something you are (fingerprint or face recognition). If two out of three factors are used for an authentication, there is a strong control and therefore SCA.

Strong Customer Authentication is mandatory for transactions over 30 euros since September 14th. However, not everyone is prepared for it.

Consequences of the introduction of SCA

For an iDEAL transaction or access to your bank account, there is very little change, because SCA has always been used there. For example, an iDEAL payment, for which you used a username and password (login) substituted with an SMS code or a temporary code that was generated through your debit card and pin code. On your phone, you make online payments with iDEAL and the app registered with your bank on your phone is the first factor and your fingerprint, for example, is the second factor.

On the other hand, for credit card payments, SCA is often not properly configured yet. You may encounter it sometimes (generate an e-code or a temporary code by SMS), but in many online environments this has not been built in until now. Due to the many parties that have indicated that they are not yet ready for SCA on credit cards, the decision has been made to postpone the enforcement of SCA on credit cards until December 31st, 2020.

Your platform

We, Online Payment Platform, have already implemented SCA on all our platforms. Including the platforms that process credit card transactions through us. If you process your credit card transactions otherwise, make sure that you are ready for SCA well before December 31st, 2020, because a second delay will not occur!