The United Kingdom just recently implemented new strong customer authentication (SCA) criteria, which are a set of guidelines that will alter the manner in which customers validate their identities while making online purchases. The requirements for the SCA weren’t established until September of 2019, therefore the entire implementation has taken over three years to arrive. For a considerable amount of time, the rules of the SCA have been applied to a limited number of transactions.
Since the beginning of this year, the percentage of transactions for which SCA requirements apply has been steadily increasing. This is because merchants and payment service providers (PSPs) have been preparing to meet the enforcement date, which is the date by which all transactions must be SCA-compliant.
According to a release from the British Retail Consortium, the aim is that SCA will help minimize fraud and better safeguard customers and their money when they shop online. This hope is based on the fact that a rising percentage of purchases are being conducted digitally.
When making a purchase, customers will now be required to demonstrate that they are who they say they are by confirming two of the following three ‘factors’: something the customer is, such as a fingerprint or facial ID; something the customer knows, such as a pass code or password; and something the customer has, such as a mobile phone.
In reality, this can imply that clients are sent a text message asking them to authenticate a purchase, after which they are sent a pass code and requested to input it on screen. Other forms of confirmation may include responding to an automated phone call on either your landline or cell phone, as well as using an application on your mobile device.
Customers may not always be requested to complete additional security procedures if they are doing certain sorts of transactions since robust customer authentication is not required for all types of transactions. These may be purchases that are considered to have a “low risk” of being associated with fraudulent conduct, such as when purchasing low-cost things, or they may be transactions that are made often, such as subscriptions.
Retailers are prepared for the transition since they have spent a significant amount of time and effort building their systems to handle the additional security checks. To ensure the smooth implementation of the new legislation, financial institutions will need to be well-prepared for the upcoming shifts.
Reference:
“UK Introduces New Strong Customer Authentication Requirements.” Fibre2fashion.Com, https://www.fibre2fashion.com/news/e-commerce-policy/uk-introduces-new-strong-customer-authentication-requirements-279595-newsdetails.htm.
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