Strong Customer Authentication (SCA)

On September 14, 2019, Europe implemented a new online payment law known as Strong Customer Authentication (SCA). Its goal is to reduce fraud and increase the security of online payments.

As a store owner selling to European clients and taking credit cards or bank transfers online, you should prepare your store for SCA so that you may continue accepting payments without interruption. This post will explain what SCA is and what you can do to prepare.

Understanding SCA

Strong Customer Authentication is a component of the second Payment Services Directive (PSD2), which was designed to make online payments more secure and safe. SCA adds a stage to the payment process that requires clients to further identify their identity in order to complete the transaction.

Strong Customer Authentication applies if the buyer's and seller's banks are both situated in the European Economic Area. It may also apply if just one of the buyer's banks is located in Europe. The issuing bank makes the final decision on whether to use SCA. As a result, even if your shop is not in Europe but sells to European clients, we urge that you prepare for SCA. This will assist you to avoid having transactions denied when SCA goes into effect.

On the customer's end, the SCA payment process will consist of the following steps: the buyer will check out in your shop before proceeding to the payment phase. When the buyer reaches the payment phase, they will input their card information as normal, but they will then be required to complete an additional step to verify their identity.

The card issuing bank determines the authentication method. It may, for example, be a one-time code texted to a mobile phone or a fingerprint on the bank's mobile app.

The transaction will be processed after this step is completed. If the bank needs SCA but SCA authentication is not requested or performed during the payment, the bank will reject the transaction.

The payment gateways are primarily responsible for SCA preparation. They must comply with this new legislation in order for purchasers to pass the additional authentication stage for online payments.

However, there is something you can do to ensure that your shop complies with SCA and that you may continue collecting credit cards online from European clients smoothly. We discuss what you can do based on where you sell and how you accept money in the sections below.

Stores outside the EU

SCA is the rule that will be implemented in the EU zone. However, if you are not in the EU but your clients are, the SCA may still apply.

The card issuing bank makes the final choice on whether to apply SCA when only the customer's bank is in the EU. It is preferable for you to be prepared for SCA in order to ensure that EU clients may finish payments in your store. Continue reading to learn what you can do.

Stores in the EU

When both banks (yours and the customers) are in Europe, SCA will apply. You might take various steps depending on the payment type you use.

Stores accepting credit cards

• If you use Stripe or Square in your shop, make sure it is SCA compliant on time. You don't need to worry about anything as long as your shop uses one-page checkout.

To enable one-page checkout in your store, follow these steps:

1. Go to your Control Panel and choose Settings, then select What's new.
2. Locate and enable the Next-gen Storefront or Next-gen Checkout Flow upgrade. Depending on whether you are already utilizing the next-generation design for other shop pages, you will notice one of these improvements in your store.
3. If you don't see this update or the "What's new" page, your shop is up to date and uses all of the most recent features.
   
4. If you use alternative payment methods, such as Authorize.Net, 2Checkout, and so on, the payment gateway should handle all of the preparations because the whole payment process takes place on their website - clients are sent from your shop checkout to the gateway's website.
5. Contact the payment gateway's support team to determine whether they will comply with SCA.

If your payment gateway does not support the new SCA measures, consider accepting other payment methods in your store.

Stores not accepting credit cards

Customers that pay you in cash or through other offline payment methods require no action from you! SCA only applies to online credit card acceptance.

Stores in the UK

SCA will apply to the United Kingdom as well, although at a later date. You have roughly 18 months to prepare since the UK has another deadline for SCA to go into effect.