Getting ready for PSD2 and Strong Customer Authentication (SCA)
The Second Payment Services Directive (PSD2) is a revision and a replacement of the first Payment Services Directive, regulating all payment services across the European Economic Area (EEA).
PSD2 introduces Strong Customer Authentication (SCA), which will apply to customer-initiated online card payments where the bank of the card holder and the payment provider of the business are both located in the EEA. The requirements also apply to UK organisations on departure from the EU.
SCA ascertains a customer's identity and relies on the presence of two factors for authentication of a transaction. The most commonly used mechanism for card payments is 3DSecure. Customers know 3DSecure under the name of “Verified by Visa” or “Mastercard Identity Check”. 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. 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 mandatory
The directive will become mandatory on 14 September 2019.
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.