Secure Customer Authentication (SCA)

SCA is a requirement of the European Union’s Revised Directive on Payment Services (PSD2) for payment service providers within the European Economic Area. It requires that electronic payments are performed with multi-factor authentication to increase the security of electronic payments.

Multi-factor authentication involves using two or more independent sources of validation to verify the identity of the user, such as:

  • something they know (password or PIN)
  • something they have (mobile device or token)
  • something they are (fingerprint or facial recognition)

This adds an extra layer of security by ensuring that even if one factor is compromised, an attacker would still need to bypass at least one more barrier to access the account.

SCA is not only beneficial for the protection of consumers’ financial data, but also for merchants and payment service providers as it reduces the risk of fraud and chargebacks.

However, implementing SCA can also present challenges, such as the need to update payment systems, the potential for increased friction in the payment process, and the need to educate consumers about the new authentication methods.

Nonetheless, with the rise in cyber attacks and online fraud, the implementation of SCA is a crucial step towards enhancing the security of electronic payments.

In conclusion, Strong Customer Authentication (SCA) represents a significant advancement in the protection of electronic payments within the EU, aiming to enhance security and reduce fraud. While it poses challenges in implementation and user experience, the benefits of increased security and reduced financial risks firmly underscore its importance.