Community
In a statement released on 25th March, the European Banking Authority (EBA) has confirmed that, for the moment, the December 31st 2020 enforcement deadline for PSD2 Strong Customer Authentication (SCA) remains in place. This is despite the universal disruption caused by the COVID-19 pandemic. The confirmation comes at the end of a wider set of recommendations on steps Financial Institutions and PSPs should take in response to the crisis, including raising the contactless transaction limit to €50.
e-commerce merchants have other urgent priorities
The fact that the EBA is sticking with the deadline (note in the UK the FCA has set a later cut-off of 14th March 2021), is unwelcome news for a payments and retail industry struggling with multiple challenges resulting from widespread lock downs on top of already aggressive timescales for PSD2 SCA adoption.
Most e-commerce merchants will have very different priorities for the foreseeable future. Those in sectors such as grocery are having to rapidly re-engineer systems and processes to cope with massively increased demand, while trying to ensure that they can genuinely serve priority vulnerable customers.
Elsewhere many will be focussed on short term survival and recovery once the worst of the crisis is over. A study just released by Ecommerce Europe reports that 65% of respondents believe the pandemic will lead to a decline in sales, partial or complete closure of the business during quarantine periods and release of staff.
Updating systems to support PSD2 SCA is unlikely now to be a high priority for many retailers.
Easing the burden on e-commerce retailers
Unfortunately, the biggest challenge in the national SCA migration plans now taking shape is educating merchants and getting them on board.
Acquirers, payment gateways and 3DS vendors will be playing the pivotal role in making this happen.
There are some key things they need to do to keep things as simple as possible for pressurised merchants:
Detailed guidance is available from Visa, MasterCard, UK Finance and other industry bodies, however the trick is breaking this down into clear and simple steps and removing the complexity for merchants who currently have urgent conflicting priorities. Even if the EBA does relent and relax the deadline in response to industry and local regulator concerns, it is unlikely to be for long and conflicting demand on merchants will still be significant.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
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