New European Online Seller Regulation Requires Strong Customer Authentication (SCA) 2021

SCA regulations

By Caitlyn Buchanan, 28.06.2021

Strong Customer Authentication (SCA) is a European regulatory requirement that came into force in the first six months of 2021 for many countries within the European Economic Area. It is essential that businesses selling products or services online update their online payments systems to comply with the new SCA regulation as soon as possible. SCA is the second part of the broader European payments regulation known as, the Payments Services Directive (PSD2) which has been in place since September 2019. The SCA regulation adds an extra layer of security to ensure the online payment are being made by the authorised cardholder.

During the Covid-19 lockdown restrictions, businesses across the globe found a lifeline selling their products and services online. The Pandemic has changed the way we shop and pushed eCommerce and online shopping into overdrive. According to a report published by the United Nations Conference on Trade and Development (UNCTAD), global online sales (including B2C & B2B) reached 26.7 trillion USD in 2019, equivalent to 30% of the global Gross Domestic Product that year. In 2020, eCommerce figures show a dramatic rise in online retail sales from 16% to 19%. Retail e-commerce sales alone accounted for 4.28 trillion USD in 2020 and is expected to reach 5.4 trillion USD in 2022.

How does SCA work?

With the surge in online shopping, it has become even more important that eCommerce websites provide a positive, secure and payment process for their customers. Embracing the new SCA regulations will benefit businesses and their customers. This additional layer of security aims to reduce fraud by ensuring the authorised cardholder is making the payment. The cardholder will be asked for two of the following pieces of information:

  • A pre-set password
  • A code received by text message or card reader.
  • Fingerprint or facial recognition

Please note: If the person’s identity cannot be authenticated the payment could be declined. 

How can I prepare for SCA?

The easiest way for an eCommerce business to prepare for the new SCA regulation is to ensure their eCommerce platform and payment gateway utilises 3D Secure (3DS) technology. This will not happen automatically; businesses are advised to contact their website support team and/or payment gateway provider to enable 3DS technology on their website and payment account.

If you have any questions or need assistance ensuring your website is compliant with the SCA regulation, please contact us today or call +353 (0) 16461627. Our website team can access your eCommerce website and assist you to make the necessary updates. Alternatively, if you would like to start selling products or services online, please contact us to request a free website consultation via phone, skype, or zoom.

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