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Online Payments are Changing

Posted 04/07/2019 by Patrick Leavy

From the 14th September 2019 European regulations will require customers to use ‘strong authentication’ to make payments online within the European Economic Area (EEA), including the UK. These changes will apply to online payments when both the cardholder’s bank and business' payment provider are in the EEA.

When SCA (Strong Customer Authentication) goes into effect, a form of two-factor authentication will be required for many online card payments.

So, what does that mean for the consumer?

While many consumers are already using two-factor authentication there is also a large proportion who are not.

Two-factor authentication is an additional layer of security used to make sure that people trying to gain access to an online account are who they say they are.

Normally the user will enter their username and password, but now they will be required to also provide another piece of information such as a PIN, additional answers or fingerprint etc.

What does it mean if you run a business that accepts online payments?

These changes are likely to affect your online customer journeys. Previous implementation of such regulations in other countries has resulted in significant drops in trade on day one as a large proportion of customer payments are declined. This tails off as customers get up to speed.

After the 14th September 2019, any non-compliant transactions may be declined by the issuing bank. If you are not compliant with the SCA regulation following this deadline, you (the merchant) may be liable for charge-back.

You might want to forecast a temporary dip in cash takings mid-September.

To find out more information please see some useful links below.

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