How Can Biometric Payment Cards Help the Payments Industry Transition to SCA?

In the first post of our series on SCA (Strong Customer Authentication), Catharina Eklof, Chief Commercial Officer, IDEX Biometrics, explains how biometric payment cards allow card providers to achieve SCA compliance without compromising on customer experience.

The inevitable arrival of SCA (Strong Customer Authentication) is certain to produce shockwaves across the payments industry. Implementing the new compliance requirements set out in the PSD2 mandate will involve considerable challenges, yet ultimately the changes will represent the greatest opportunities yet for both protecting consumer data and transactions.

The Advent of SCA

The second set of regulations for payment services (PSD2) was passed in 2015 and it was in 2019 that the most relevant aspects to online payments came into effect. Yet subsequent delays to the compliance deadlines mean that the new two-factor authentication methods (SCA) need not be rolled out until March 2022.

So what exactly is SCA? Strong Customer Authentication requires multi-factor identification for all payer-initiated payments. This identification can be two of the following three methods: something you know (e.g. a password); something you have (e.g. a phone); something you are (e.g. fingerprint). This will be the biggest change to the payments industry in a long time, which is why there have been repeated extensions to the SCA deadline.

Extensions have been issued to allow card providers and others within the payments industry to adequately prepare for the changes required and also took into account concerns about the readiness of the industry to meet the myriad of challenges presented by the new rules. Consideration was also given for the effects of the COVID pandemic.

With the extra time granted, retailers now have the perfect opportunity to effectively strategize, pilot and implement their new verification and authentication tools.  This is likely to be the final delay to the rollout of SCA, so retailers should act now to ensure that they are adequately prepared for a smooth transition by March 2022.

Taking The Long View

The benefit of this latest extension should also give all payment sector organizations plenty of time to ensure that they don’t rush into adopting any short-term solutions. Instead, these extra months should grant institutions the opportunity to explore and develop authentication methods that will truly stand the test of time, thereby reducing the risk of yet more technological upheaval further down the line. Choosing to implement robust solutions now will be the most cost-effective and customer-friendly approach, and, happily, there is already the perfect technology available to make this a reality.

 Choosing Biometric Payment Cards

The use of biometric payment cards is a future proof solution to the challenges of SCA and offers card providers and retailers a robust and secure tool in the fight against card fraud. Simple to use with an integrated fingerprint sensor, these cards are highly convenient without any additional steps.  As a biometric authentication method, these cards can replace the need for a customer to carry additional identifying tokens or to have to memorize a password or PIN. As a technology already widely used in smartphones and other everyday devices, customers are highly likely to have confidence in this method, making it the perfect means of ensuring a seamless transition to the new SCA payment approach.

Act Now and Secure the Future

The next few months is the ideal time to put into action the necessary steps to implement a future proof payment system centered on biometric payment cards. Biometrics is undoubtedly where the future of authentication lies, so getting ahead now makes perfect sense for any payment sector institution.