UK regulator FCA agrees for 18-month extension in SCA deadline

UK financial regulatory body- Financial Conduct Authority (FCA) has reportedly agreed to extend the deadline for the payments and e-commerce industry to implement Strong Customer Authentication (SCA). It is ready to set up an 18-month phased implementation plan in a bid to take into consideration the recent opinion of the European Banking Authority (EBA), the complex requirements as well as the lack of preparedness on behalf of the financial institutions.

Jonathan Davidson, Executive Director for Supervision – Retail and Authorisations, FCA, said, ‘The FCA has been working with the industry to put in place stronger means of ensuring that anyone seeking to make payments is not a fraudster. While these measures will reduce fraud, we want to make sure that they won’t cause a material disruption to consumers themselves; so we have agreed a phased plan for their timely introduction’.

Under this new plan, the firms who are not compliant with the new SCA requirements by the September deadline, will not be penalized but will be expected to undergo the required changes during the 18-month period. The FCA also intends to keep a check of the SCA’s impact on different consumer groups.

SCA or Strong Customer Authentication is a way to ensure the security of payments as well as mitigate fraudulent practices during this authentication process. The regulation requires the creation of additional authentication infrastructure in the checkout flow and will require authentication elements like something the customer knows ( like a PIN/Password), something the customer has ( like a phone or a hardware token) or something the customer is ( like a fingerprint/ face recognition).

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