PSD2 strong customer authentication regulation has created a legislative framework that secures new ways to exchange payments but under stricter regulations. Strong Customer Authentication (SCA) is a requirement of the second Payment Service Directive (PSD2 authentication requirements) in the UK and the EU. As PSD2 SCA solutions have been enforced across Europe, extra layers of fraud protection are implemented prior to payment authorisation. Online shoppers are required to authenticate themselves through:
- Biometrics (i.e. iris, fingerprint). Something inherent and unique to the buyer.
- Something only the buyer knows (i.e., PIN or password)
- The specific device that is used to make the purchase.
Unfortunately for the merchants, 3D Secure anti-fraud layers create friction that slows down checkout time. This generates higher abandonment rates.
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