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August 14, 2019

FCA agrees phased implementation of Strong Customer Authentication

The UK Financial Conduct Authority (FCA) has agreed a plan that gives the payments and e-commerce industry extra time to implement Strong Customer Authentication (SCA). From 14 September 2019, new European Union (EU) rules will start to apply that impact the way in which banks or payment services providers verify their customers’ identity and validate specific payment instructions. The new rules aim to enhance the security of payments and limit fraud during this authentication process.

The FCA has agreed an 18-month plan to implement SCA with the e-commerce industry of card issuers, payments firm and online retailers. The plan reflects the recent opinion of the European Banking Authority (EBA) which set out that more time was needed to implement SCA given the complexity of the requirements, a lack of preparedness and the potential for a significant impact on consumers.

The FCA will not take enforcement action against firms if they do not meet the relevant requirements for SCA from 14 September 2019 in areas covered by the agreed plan, where there is evidence that they have taken the necessary steps to comply with the plan. At the end of the 18-month period, the FCA expects all firms to have made the necessary changes and undertaken the required testing to apply SCA.

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