If you have any questions or feedback, please let us know! Recurring direct debits on the other hand are considered “merchant-initiated” and don’t require strong authentication. SCA is being brought in to make dealing with money and making payments online more secure and to reduce payment fraud. The reason for this being that card payments are instant and initiated by the end-customer, and the payment or the consent to access account details is instant, which creates risk. We’ll let you know when we publish new guides or updates. The most relevant exemptions for internet businesses are: A payment provider (like Stripe) is allowed to do a real-time risk analysis to determine whether to apply SCA to a transaction. Since the implementation of the original PSD, there have been new technological advances within the payments market seeing an increase of Third Party Providers (TPPs). Share your email so Stripe can send you updates on Strong Customer Authentication, guides, and industry news. These payments technically fall outside the scope of SCA. 3D Secure 2—the new version of the authentication protocol rolling out in 2019—will be the main method for authenticating online card payments and meeting the new SCA requirements. We have released a new foundational payments API that uses Stripe’s SCA logic to apply the right exemption and trigger 3D Secure when necessary. In practice, marking a payment as a “merchant-initiated transaction” will be similar to requesting an exemption. So long as the subsequent payments are initiated by the merchant, further SCA will not be required so long as the amounts being charged are within the reasonable expectation of the end customer. Additionally, on 16 October 2019 the European Banking Authority (EBA) issued an opinion delaying the deadline of SCA until 31 December 2020, effectively setting a Europe-wide deadline. However, competent authorities from individual EEA countries, such as the FCA in the UK or BaFin in Germany will be responsible for enforcing SCA when it comes into force. Learn more in our. SCA is a form of two-factor authentication designed to prove that end-customers are who they say they are, with specific rules around what constitutes ‘authentication’. Visit our site for more information on Stripe’s SCA-ready products. In the UK alone, £2 billion was stolen from credit and debit cards in 2017, with 28% of people becoming the victim of online payment fraud. Applying 3D Secure typically adds an extra step after the checkout where the cardholder is prompted by their bank to provide additional information to complete a payment (e.g., a one-time code sent to their phone or fingerprint authentication through their mobile banking app). The EBA has yet to amend this deadline in any way in response to COVID-19. This may only be possible if the payment provider’s or bank’s overall fraud rates for card payments do not exceed the following thresholds: These thresholds will be converted to local equivalent amounts where relevant. .css-10euct3{padding:0;margin:0;font-family:inherit;font-style:italic;}.css-10euct3:empty{display:none;}The three types of authentication allowed under SCA. On 30 April 2020, an additional 6 months was granted in response to the exceptional COVID-19 circumstances, resulting in the current September 2021 deadline. It is highly likely that SCA will continue to apply to the UK, regardless of the outcome or timing of Brexit; the FCA has made its plans clear - it wants SCA to continue to apply; there has been no suggestion to the contrary by other European regulators. You’re viewing our website for the United Kingdom, but it looks like you’re in Bulgaria. This means subscription businesses, SaaS businesses and membership businesses will all need to prepare for SCA. SCA requires authentication to use at least two of the following three elements. Although the regulation was introduced on 14 September 2019, we expect these requirements to be enforced by regulators over the course of 2020 and 2021. Olivier Godement is a Product Manager at Stripe who drives authentication efforts to help businesses prepare for Strong Customer Authentication. Payments created through the Stripe Dashboard, enforced over the course of 2020 and 2021. These TPPs offer new and innovative ways of accessing consumers’ account information and initiating payments. You might have had an internet hiccup. In particular, SCA will apply each time a payer: initiates an electronic payment transaction, carries out any action through a remote channel which may imply a risk of payment fraud or other abuse. Other card-based payment methods such as Apple Pay or Google Pay already support payment flows with a built-in layer of authentication (biometric or password). We use cookies to improve your experience and for marketing. It aims to ensure that the end customer is the rightful owner of the bank account or other payment mechanism (e.g. We expect these requirements to be enforced over the course of 2020 and 2021. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. The cardholder’s bank needs to track the number of times this exemption has been used and decide whether authentication is necessary. PARIS), is authorised by the ACPR (French Prudential Supervision and Resolution Authority), Bank Code (CIB) 17118, for the provision of payment services. Using exemptions for low-risk payments can reduce the number of times you will need to authenticate a customer and reduce friction. Currently, the most common way of authenticating an online card payment relies on 3D Secure—an authentication standard supported by the vast majority of European cards. When completing authentication for a payment, customers may have the option to allowlist a business they trust to avoid having to authenticate future purchases. Learn more about Stripe’s SCA-ready products. Within each category, there are a number of potential methods for satisfying that category. The main impact is very likely to be on card payments and bank transfers. Similar to exempted payments, MOTO transactions need to be flagged as such—with the cardholder’s bank making the final decision to accept or reject the transaction.


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