Strong Customer Authentication Solutions – Business Benefits Involved
4 min read
For some people, strong authentication is not just a compliance exercise but will also work as a driver for innovation. Authentication is one process of proving who you are and confirming your intention to perform any action like allowing access to account info or making a payment transfer. All services will be covered and done electronically.
Stronger customer authentication is one European regulatory requirement, which is based on the use of two or even more elements – knowledge, possession, and inherence. It can be anything like fingerprint biometric data or facial data.
What is the reason behind its growing popularity?
While the PSD2 or the Payment Services Directive 2 came right into force from January 2018, and SCA was enforced from 1st January 2021. Understanding the value of PSD2 will let you know the importance of SCA these days.
- PSD2 was mainly created for stimulating innovation, competition, and participation from the non-banks in the electronic payment scale. It will increase consumer protection by just making the payments safer for you and under the secured panel.
- It will need banks to open up APIs to the third parties for performing some of the account t account-based transactions. It will help in accessing the account information like the transaction history and more.
- SCA will apply to any electronic-based payment transaction with a minimum of one leg in the EEA or EU. It can be either account transactions or payment card transactions.
- PSD2 will further rely on the value of SCA. It is one key to protecting the consumers and then allowing the trusted third parties to access the current bank accounts.
Things constituting the SCA and the reasons why they are hard to deliver:
SCA will need two-factor authentications along with the dynamic linking. It ensures that the consumer is informed fully and makes one active decision to authorize one payment transaction.
So, for successfully processing any payment under new rules, banks must ask the customers for a minimum of two authentication factors. It will be the Pin entered on their mobile device, which will focus on two factors like possession and knowledge.
- Even after all the business opportunities that PSD2 has opened, the SCA adoption has always been slower than those of the European authorities.
- The main reason for that is implementing SCA will need a well-structured user experience for minimizing friction.
- It will strike a balance between UX and SCA, and it has proven to be a quick challenge for most companies.
- There are some instances when SCA is not needed, mainly for the regular subscriptions or for the transaction values, which are less than EUR30.
The current hold:
Before you proceed further with the strong customer authentication solutions, it is important to understand the current status and plans of SCA first. There are some interesting thoughts, which will help you to make the right decision when the time comes.
- The major motivation for deploying SCA remains to be a fraud. It will reflect the industrial challenges and their importance.
- The major choice for the SCA will be the current electronic IDs like bank IDs and more.
- Even though the deadline is pretty much looming, not everyone is ready to focus on the values of SCA as of date.
Embracing the value of SCA:
SCA is here to present some of the fundamental business benefits. With the right kind of mindset, it gets to strengthen the business using some of the major points.
Customer acquisition and innovation:
With the help of a simplistic SCA solution, you can take the customers from their mete interest in your product to settling payment within a few minutes! Thanks to SCA, using newer services has never been this much fun! Some of those examples are self-service management of geographical limitations, top-up, pre-paid credit cards, merchant or transaction-based credit cards, special offers, spending analytics, and so much more.
Increasing security for the consumers:
For the majority of the consumers, SCA is mostly like a lock with a secured key for protecting money. Getting a lock with easy use and secure key will establish a common trust within the consumers.
The most secure and easiest key will get the most used option. On the other hand, implementing the SCA will offer the opportunity to become number one.
High-end compliance:
SCA is the main compliance element, which ensures a level playing field for all the sectors in the payment market. It will address the incumbent banks and some new entrants as the SCA mechanisms will be widely made available by incumbent banks. Here, compliance will just be the beginning. After basic compliance, the SCA solution must be improved for delivering a top-notch user experience.
Check in with all the options in here and get a thorough idea of SCA and how it actually works in your favor, especially when you run a business!
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