Retailers with an online presence need to ensure they fully support Strong Customer Authentication (SCA) by 14 March 2022 or risk customer purchases being declined.

The SCA is a new set of rules from the Financial Conduct Authority (FCA) to help protect customers from fraud when they are shopping online. With increasing amounts of purchases being made online, these new rules will help to ensure that customers are safe when shopping and their money is better protected. 

The changes will mean that when customers buy something online, they will be asked to verify their identity, for example, through their banking app or a one-time passcode via text or phone call.

From 18 January card issuers have started declining some non-compliant transactions, with all non-compliant transactions being declined after the 14 March deadline.  Retailers are therefore strongly urged to ensure readiness as soon as possible as SCA requests are already being stepped up to avoid a cliff edge implementation.

Payment providers are ready to help online retailers upgrade their payments process to support SCA compliant transactions, if they have not done so already.

Jana Mackintosh, Managing Director of Payments and Innovation at UK Finance said: "Fraud is a growing problem, with criminals stealing more than £750 million in the first half of 2021 alone. That is why it is more important than ever that additional protections like Strong Customer Authentication are put in place. For retailers, implementing SCA will provide customers peace of mind that payment processes are more secure.  

"The industry and stakeholders have worked tirelessly to get ready for this change and we encourage any retailers who have not yet implemented SCA to act as soon as possible to ensure the new protections are available to all."

What do businesses need to do?

Retailers need to speak to their payment providers (e.g. acquirer or gateway) and, where relevant, their trade associations, to ensure they are ready to meet the regulated timelines. This includes knowing:

a) which version of 3DSecure to use (the technology which enables SCA)

b) which exemptions they might be able to use to encourage a better customer experience, and how to use these

c) correct flagging (exemptions or out of scope) of transactions sent directly to authorisations

d) soft-decline support (if applicable)

e) dates and windows for testing their checkout process/website

How will SCA affect a business?

The benefits of SCA include reduced fraudulent transactions, therefore reducing the business' potential fraud losses. It will also improve customer satisfaction thanks to confidence in the payment system, and it will shift the liability for fraud from the retailer to the payment provider.

Failure to implement SCA could result in a loss of online sales and customers as payments are declined and people move to use competitors who have compliant and smooth check-out processes that deliver a better customer experience.

More information on SCA can be found on the UK Finance website