How U.K. payment firms are bracing for Strong Customer Authentication

The introduction of PSD2 required merchants to implement Strong Customer Authentication (SCA). The implementation of SCA aims to reduce card fraud, but appeared to be difficult to implement for merchants. Last year, it was announced by the EBA that the deadline for SCA was delayed from September 14, 2019 to 31 December, 2020 since most UK merchants were not able to be ready in September.

However, research from Stripe concluded that many merchants will still not be able to meet the deadline. The research found that only 44% of the business is expected to be ready in time.

The challenge for merchants is to offer the simplest method of two-factor authentication and to make sure that this process is only invoked when necessary. In order to achieve this, PSPs are investing in new technologies. Particularly in new ways to implement biometric verification.

Stripe predicts that the use of biometric-based payments will rise quickly over the long term, as a consequence of the implantation of SCA.