Strong Customer Authentication (SCA) changes in Europe
Payments are becoming more secure in Europe — what does that mean for you?
Every time you make payments online, banks are required to process your request and determine whether to approve or reject the transaction based on a number of factors, mainly to combat fraud; now lawmakers in Europe are implementing new regulations to adapt to the changing ways that customers are paying for things on the internet. On September 14th, 2019, the second Payment Services Directive (PSD2) will come into effect; this EU law is designed to ensure secure online and electronic payments for customers within Europe.
The way the new regulation works is that any customer-initiated purchase (not for recurring payments) over 30 euros will require two out of the following three security measures:
- Something the customer knows (ex: password, PIN)
- Something the customer has (ex: phone, device)
- Something the customer is (ex: face recognition, fingerprint ID)
For most customers, this will either not change how they use online payments or will only add a short step to the process. If a payment cannot prove two of the above measures it will be declined automatically. As a European, your payment flow would look something like this: initiate a payment ⇒ accept the payment on your phone app ⇒ you’re all done!
What this means for Cobot is that we will be making a few small changes to ensure that we are compliant with the directive and continuing to provide safe, secure, and easy-to-use payment options. This could affect some payment flows within Cobot, mainly for space members.
As we get closer to the date when PSD2 comes into effect, we will have another blog with the specific details of what this means within Cobot. For now, we just wanted to let you know that we are well aware of the upcoming regulations and will always work to ensure that we not only comply with the law but maintain a strict level of security beyond what is required.
Want to know more?
If you’d like to know more about the specifics of PSD2, we’ve put together some materials that include more detailed information:
- https://www.europeanpaymentscouncil.eu/sites/default/files/infographic/2017-11/EPC_Infographic_PSD2_March-2017_Updated November 2017.pdf
- https://en.wikipedia.org/wiki/Payment_Services_Directive#Revised_Directive_on_Payment_Services_(PSD2)
- https://en.wikipedia.org/wiki/Strong_customer_authentication
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