Strong Customer Authentication: 18 Months Later

What is SCA?

SCA requires banks and other payment providers to use two or more factors of authentication to verify a customer's identity when they make a payment online. These factors can include things like passwords, PINs, one-time passcodes, and biometrics.

Why was SCA Introduced?

The goal of SCA is to make it more difficult for fraudsters to steal people's money by making unauthorised payments online. By requiring two or more factors of authentication, SCA makes it more difficult for fraudsters to gain access to a customer's account, even if they have stolen their login credentials.

For example, a customer might be asked to enter their password and then receive a one-time passcode in a text message. Or, they might be asked to scan their fingerprint or face using a biometric authentication device.

In most cases, customers will only need to provide two factors of authentication when they make a payment online. In addition, if they are making a payment that is below a certain threshold, they may not need to provide any additional authentication at all.

How has SCA been working?

According to a recent UK Finance article, SCA has been a success, with the most recent UK Finance Annual Fraud Report highlighting that remote purchase fraud has declined to its lowest levels since 2015 as a direct result of these rules, whilst the number of online purchases continues to increase.

Overall, SCA is a valuable tool in the fight against fraud. It has the potential to make online payments more secure and to protect businesses and consumers from fraud losses.

It is likely that SCA will continue to evolve in the future, as businesses and regulators find ways to make it more effective and easier to use.