Strong Customer Authentication deadline extended again

21 May 2021   By Dr Lucy Brown, Editor

Financial Conduct Authority (FCA) confirm merchants will have another six months to implement Strong Customer Authentication (SCA).

It means the final deadline for SCA solutions to be implemented by e-commerce companies will be 14 March 2022.

This is designed to give merchants and customers extra time to deal with the challenges of adapting systems for full SCA compliance.

Merchants are worried that implementation of SCA could reduce the number of customers completing transactions due to the extra authentication process involved.

credit card fraud laptop


The FCA say the new deadline of 14 March 2022 for full SCA implementation recognises the ongoing challenges facing the industry ahead of the previous deadline of 14 September 2021.

That deadline itself had already been extended for card-based e-commerce transactions, and it was subject to a further six-month extension due to challenges surrounding the coronavirus crisis.

For shoppers, this means some of the companies they shop with won't require additional forms of identification such as PIN codes, biometrics or passcodes sent to their mobile phones to verify a customer's identity for another year.

However, the FCA makes it clear they would encourage merchants to be SCA-compliant from 1 June 2021 in line with previous agreements.

14 March 2022 is therefore an absolute deadline for e-commerce companies rather than simply a delayed target date.

SCA concerns

The purpose of SCA is to double-check a customer's identity by adding an extra form of authentication to a credit or debit card transaction online.

For example, a passcode may be sent to a customer's mobile phone to then be entered on the merchant's website to check the account holder is in possession of the card. Other variants include opening an app to verify a transaction through Face ID or fingerprint recognition.

Customers will already be familiar with SCA as companies began rolling out the technology in 2019, despite the FCA saying they wouldn't enforce it until 2021.

Yet there are concerns within the e-commerce industry that customers will simply abandon their carts if the SCA process doesn't run smoothly when they try to checkout online with a debit or credit card.

Figures from Europe suggest the implementation there has resulted in lower conversion rates, leading to businesses missing out on numerous transactions every month which would otherwise have gone through.

This isn't necessarily positive for customers either if they're missing out on buying products they want because the purchasing process is too onerous or doesn't work properly.

With any luck, the extra six months will give merchants the time they need to modify their systems and processes to offer SCA without missing out on potential customers.

Fraud prevention

Even though SCA was originally part of an EU directive, it's one of a series of measures being implemented in the UK to try and prevent fraud and limit customer losses.

A similar measure is Confirmation of Payee (CoP) which requires payment providers to check the name on an account matches the name a customer thinks they're sending money to. It's designed to eliminate one of the methods fraudsters use to trick customers to sending money to scam accounts.

CoP also had its fair share of implementation problems, however, with the deadline for that delayed from 2019 into 2020. It finally came into force on 1 July 2020.

Anti-fraud measures that require industry-wide changes are inevitably difficult to implement, but with payment card fraud remaining the biggest cause of losses to fraud in the UK.

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