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FCA delays Strong Customer Authentication – EBA under pressure to follow

The UK’s Financial Conduct Authority (FCA) has delayed the implementation of Strong Customer Authentication (SCA). This is the second delay is has authorised. Last year, the FCA extended the deadline to March 2021. The new deadline is September 2021. It gives e-commerce firms another six months to build, test and deploy a compliant solution.

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FCA delays Strong Customer Authentication – EBA under pressure to follow

The press release from the FCA reads:“In the exceptional circumstances of the Covid crisis, we are giving the industry an additional 6 months to implement strong customer authentication (SCA) for e-commerce. This will minimise potential disruption to consumers and merchants. The new timeline of 14 September 2021 replaces the 14 March 2021 date.

“Firms are required to take all necessary steps to comply with the revised detailed phased implementation plan and critical path to avoid the risk of enforcement action.”

Meanwhile pressure is mounting on the EBA after payments and e-commerce associations throughout Europe signed a letter requiring the European Commission and the EBA to also delay SCA implementation due to COVID-19.

The signatories called on the European authorities to consider appropriate additional measures and coordination to assist in the smooth transition to SCA in all EU Member States equally. In the light of COVID-19, this should also include the possibility of an at least additional six months for the market to be fully SCA ready.

Payments Europe, an industry association representing the views of card issuers and card acquirers, also joined the growing calls for a delay. In its position paper it set out its views, urging the European Banking Authority to take note of the COVID-19 crisis and extend the December 2020 deadline.

States the paper: “Taking the circumstances into account, we join other industry groups in inviting the EBA and NCAs to give the industry and businesses more time to the adopt Strong Customer Authentication requirements, beyond the current 31 December 2020 for implementation.”

Pointing to the recent decision of the UK’s Financial Conduct Authority to push the timetable back to September 2021, Payments Europe stresses the need for a harmonised approach across national markets.

“A non harmonised approach, where the dates are not aligned between European countries, may result in transactions being declined,” the group points out.

Beyond the cards market, EPIF’s members have also highlighted that effective SCA implementation is a key building block to ensuring the smooth functioning of payment initiation service providers and account information service providers, as regulated under PSD2. Access to the underlying customer accounts should be able to rely on one single SCA.

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