Getting ready for PSD2 and Strong Customer Authentication (SCA)
Payment Services Directive II (PSD2) revises the first Payment Services Directive, regulating all payment services across the European Union (EU), the European Economic Area (EEA) and the United Kingdom. It became effective in January 2018 aiming to create a more open, competitive payments landscape across Europe. The revised directive introduced Strong Customer Authentication (SCA) – a set of new requirements for authenticating online payments expected to become enforceable at the end of 2020 across the EEA region and in September 2021 in the United Kingdom.
SCA ascertains a customer's identity and relies on the presence of at least two factors for authentication of a transaction. As soon as SCA is mandatory, transactions that are not authenticated might be declined.
The impact of PSD2
All online businesses accepting credit card payments will need to ensure their checkouts can perform SCA challenges so that card-issuing banks can process payments unless an exception under the SCA rules would apply. If the required level of authentication is not provided, transactions will be declined.
For many consumers, SCA will be a new experience. As an example, card-issuing banks who use authentication services offered through Visa or MasterCard will display a challenge screen similar to the one below when customers place orders using their credit card.
If you have an online business, it will be important for you to help educate your customers about SCA and what they should do when they see a SCA challenge to avoid increased cart abandonment.
When PSD2 becomes enforcable
PSD2 introduced Strong Customer Authentication (SCA) – a set of new requirements for authenticating online payments expected to become enforceable at the end of 2020 across the EEA region and in September 2021 in the United Kingdom.
SCA and your Amazon Pay integration
To find out how to get your Amazon Pay integration ready to support SCA, refer to the table below:
If you've used a custom Amazon Pay integration, you need to update your Amazon Pay solution by applying code changes as described in the Amazon Pay SCA Upgrade Integration Guide. The Software Development Kits (SDKs) also include these changes.
Have you used an off-the-shelf ecommerce solution to add Amazon Pay to your store?
For more information, contact your Account Manager or Amazon Pay merchant support.