Security for Online Payments is changing: What you need to know
On the 14th of September the Payment Services Directive 2 (PSD2) will begin its next stage of implementation. The new EU rule will impact the way banks and payment service providers verify customers identify and their payments.
Firms will need to begin to make plans to comply with the directive, that aims to reduce online fraud and further protect consumer rights.
The Payment Services Directive 2 means that there will be changes to how payments are processed online:
- The new EU directive mainly impacts payment providers and their security protocols.
- For online customers it means that ‘Strong Customer Authentication’ (SCA) or 2 Factor Authentication will gradually become commonplace.
- This extra layer of security will apply to most online transactions over €30 within the European Economic Area (EEA).
- 2 factor authentications may also be triggered if numerous smaller transactions are processed in a short timeframe.
Do I need to do anything?
Businesses and providers will contact you to explain any changes they’re making to how you log in or access your accounts- some may already have done so.
Will I notice the change?
Probably not. You will already use ‘Secure Customer Authentication’ if you use online banking, this extra layer of security may be used in other places to help keep your information and accounts safe.
What is Secure Customer Authentication (also known as 2 Factor Authentication)?
When you log in to a secured website or account online, you can be asked security questions, or to supply a code from your mobile phone. You may also be asked to provide fingerprints, face ID or other forms of biometric authentication. This form of authentication uses more than 1 piece of security information to verify your identity.
Does any of this matter if Britain leaves the European Union?
Yes. The FCA has stated that Strong Customer Authentication is European-Wide and current plans to leave the EU will not impact these plans.
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