Digital payments are changing - Are You PSD2 Ready

September 14th is the final deadline for companies in the EU to implement Strong Customer Authentication (SCA). This regulation is meant to reduce fraud and requires companies to use multiple identification factors on nearly any online purchase. This is not limited to any specific type of business.

There are over 2 billion people who purchase goods and services on the internet and the goal is to guarantee these transactions in the digital environment in total safety and efficiency through key factors.

Strong Customer Authentication factors

SCA is based on two or more authentication factors of different types among the following options:

• Knowledge - Something that only the user knows (eg: PIN or password)
• Inherence - Something the user "is" (eg: biometrics, behavioral models, voice recognition)
• Possession - Something that only the user has (for example, a mobile phone or a token)

These elements must be commonly independent (the violation of one must not compromise the reliability of the other) and belong to different categories (it will not be possible to use two inherence elements or only two possession elements).

SCA: when it is required

Strong Customer Authentication (SCA) must be implemented:

• When customers access their online payment account
• When customers make an electronic payment
• When customers perform an action remotely which may imply a risk of fraud

Exemptions to Strong Customer Authentication

Specific types of payment may be exempted from SCA, including:

• Recurring transactions – same amount, same beneficiary
• Low-value transactions – payments not exceeding € 30,00 or cumulative amount not exceeding € 100,00
• Whitelisted Beneficiaries – beneficiary included in the whitelist of trusted payees
• Transaction Risk Analysis (TRA) – transactions up to € 500,00

Strong Customer Authentication is a necessary adoption for all players involved in payment services as it will become mandatory as of 14 September 2019. An increased application of SCA will certainly enhance consumer protection and tackle the most common causes of cyber security breaches.

How new EU regulations will change the e-commerce?

Payment and financial service options continue to increase, leading to more positive customer experiences and a greater openness to making purchases. PSD2 has the possibility of opening up customer transactions across borders, giving them greater choice and flexibility.

Customers will get a greater degree of control over what financial information is shared and with whom. Customers everywhere have been asking for greater control over their financial information and demanded greater privacy and security in their financial and transactional data. This PSD2 e-commerce change could lead to greater consumer confidence and better customer experiences with businesses and banking.

The PSD2 e-commerce changes are likely to bring some stress and expense to businesses, it’s an important investment for a number of reasons. Not only will it help businesses remain compliant with privacy and payment laws, but it will also enable greater customer security. Customers who are more convinced of their security and privacy are more likely to continue engaging in commerce, which is good for the economy and the future of businesses all the way around.

Warply Keyboard Payments solution

The new machine learning powered by Warply, is compliant with PSD2 regulations. Through Warply Keyboard Payments, banks can be present where their customers are, on all social networks and chatting apps including FB Messenger, iMessage, WhatsApp, Skype, WeChat, Telegram etc. Everyday payments become easier and more efficient with Warply Keyboard Payments, as bank apps are capable of combing the conversational UI convenience and bank security within users' preferred messaging applications.

In conclusion

Modern solutions must combine comfort and security, there are no shortcuts. Only in this way can you win a loyal and satisfied consumer. Only an excellent user experience, giving a sense of security through technological innovations, will allow the e-commerce industry to increase the distance to traditional retailers.