On September 14th, new requirements for two-factor payment authorisation will come into force. These are aimed at reducing payer fraud and increasing security. Called Strong Customer Authentication (SCA), they apply to “customer initiated” online payments within the European Economic Area (EEA). SCA requirements are part of the Second Payment Service Directive (PSD2).
What does this mean for shoppers?
SCA means online shoppers will need to provide more information than just their card details. Shoppers will have to give at least two of the following three elements:
- Something the customer knows – such as a password or a PIN number
- Something the customer has – such as a phone or physical pass key
- Something the customer is – such as a fingerprint or facial recognition
There are some exemptions to SCA. These include:
- Transactions below €30
- Recurring payments like subscriptions and direct debits
- Apple Pay and Google Pay
- Whitelisted merchants that shoppers trust
However, most online transactions will require two-step authentication.
What does it mean for businesses?
Two-factor security will change a shopper’s payment journey, which may result in more abandoned carts. If you notice there has been a drop in sales, you might want to think about posting on your social media. For instance:
You may have noticed we‘ve recently updated our checkout process to comply with Strong Customer Authentication (SCA). The two layer security makes it safer for you to shop online and reduce fraudulent payments. This is compulsory for all companies within Europe, so please don’t be concerned about the change.
If you have a question, please don’t hesitate to get in touch or for more information, ask your bank about SCA.
Another option is to run a targeted remarketing campaign. These can help recapture shopping cart dropouts.
At checkout, shoppers will be re-directed to their banks’ 3D Secure page to prove their identity. You won’t need to worry about this bit.
Your part is to ensure your payment service providers, such as Sage Pay, PayPal and others are updated to meet the requirements. If the update isn't done before September 14th 2019, the transaction won’t be processed. It's important to speak with whoever manages your website to ensure this is done in time.
If you’d like more information on how we can help ensure your payment gateway is up-to-scratch, please get in touch.
Want to know more? Get in touch :)