At the end of the year, strong two-factor authentication (SCA) will be a mandatory requirement for all electronic payments within the EU.
On 14 September 2019, a new EU Payment Services Directive came into effect. However, an extended period for online payments was made, which runs until 31/12/20. From 01/01/2021, the EU will tighten the requirement for all electronic payments. In the future, your customers will therefore need to verify their identity when purchasing items on your webshop to make e-commerce more secure for consumers.
In this blog, we have gathered everything you need to know about the directive.
What do PSD2 and SCA mean?
PSD2 is an abbreviation for Payment Service Directive 2. In short, PSD2 is a set of rules for the European payments market. One of the significant changes in this set of rules is the requirement for strong customer authentication, which goes by the abbreviation SCA. Customer authentication is a procedure that aims to reduce fraud with new, higher security standards for online payments.
How does it affect my webshop?
After 31/12/20 you will need to add a method for meeting SCA to your checkout through, for instance, CAPTCHA or confirmation by SMS on all payments above €30.
Therefore, you should contact your payment providers and ensure that they have a solution for your payment gateway that meets the requirement, as well as follow their instructions. Some payment gateways such as Epay, QuickPay and Nets Easy, already support strong customer authentication through the two-factor authentication solution 3D Secure, and here you only have to make sure the solution is enabled in your payment gateway.
If you do not comply with the new legislation, it will mean that you will no longer be allowed to take payments through your webshop. Moreover, you may risk fines - and no one wants that!
You can also see our guide on how else to optimize your checkout.
Keep track of your payments in Shipmondo
With a free Shipmondo-account, you can connect one or more payment gateways to your order integration, and so gather your logistics activities into one system. By setting up your payment gateway in your account, you can, for instance, withdraw money, complete orders and print shipping labels directly in Shipmondo, and thereby avoid switching between multiple systems, which is time-consuming and inefficient.
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