With the coronavirus putting a lot of pressure on businesses, the UK Financial Conduct Authority has yet again extended the deadline for Strong Customer Authentication (SCA).
The payments regulation, which was initially pegged for an implementation of 14 March 2021, has now been pushed back by six months to 14 September 2021. This move has been made to minimise any potential disruption on consumers and merchants.
UK Finance, which is a coordinator for the industry, will offer a detailed phased implementation plan and critical path for stakeholders.
Until this is released, the UK financial regulator said firms should continue to preparatory activities such as end-to-end testing.
SCA, which comes under the European PSD2 directive, has had a tough time and has had a slew of implementation postponements. It was initially set to be enforced in September 2019; however, due to concerns of market preparedness, the European Banking Authority gave national competent authorities (NCAs) the ability to delay the implementation where they see fit.
Under the regulation, online transactions will need to be conducted with a combination of verification types. There are three possible options for merchants to utilise: knowledge-based verification such as a password or a PIN, an item in possession like a credit or debit card, and finally biometrics which is most commonly a fingerprint.
Regulators across Europe have set differing deadlines for their SCA rules. The UK and Ireland both set to delay their implementations by 18 months.
The regulation has caused a lot of fear in the market. A study from Forter claimed that 49% of UK consumers were likely to abandon future purchases if additional authentication services were needed. While Payments giant Stripe claimed Europe could lose around €57bn in economic activity in the first 12 months of implementation.
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