How Does Strong Customer Authentication Make Online Shopping Safer?

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(Pocket-lint) – From Monday, online retailers operating in the EU and UK must offer strong customer authentication (SCA) at checkout.

Indeed, from March 14, 2022, all online purchases will be compulsorily protected by additional security measures. This will ensure that a buyer is who they say they are and hopefully reduce fraud.

Any retailer that does not use SCA technologies at checkout may have their payments declined.

So how does this affect you and what should you expect? We’ll explaine everything here.

What is Strong Customer Authentication?

Thanks to a European directive also used by the UK after Brexit, online retailers who want to sell products in the European Economic Area, Great Britain and Northern Ireland must use SCA. It’s actually a two-factor authentication system used at checkout to add an extra layer of protection for purchases.

This forces banks to perform additional checks on the identity of shoppers and retailers to support new authentication systems.

Rather than a simple password, which has been the common authentication method for online purchases for many years, banks will require two forms of identification at checkout. This can be the original password, a device that only the buyer has access to (like a mobile phone), and/or a biometric identifier (fingerprint, for example).

Many online retailers already use SCA. You may have come across it on a website or in a mobile app. However, it has not been mandatory to date.

When will Strong Customer Authentication be required?

Originally, the SCA was to become mandatory on September 14, 2021, but the FCA has granted the industry an extension of the deadline until March 14, 2022.

Retailers who don’t support Strong Customer Authentication checks afterwards may find that banks decline payments, meaning the buyer will also be declined.

Does SCA apply to contactless payments?

SCA also applies to contactless payments, which is why customers may sometimes be prompted to enter a PIN after tapping their contactless card. Contactless payments made over the phone will typically also have used a PIN or biometric system to unlock the handset first, thus complying with the new guidelines.

Written by Rik Henderson. Edited by Chris Hall.