With the European Union’s Strong Customer Authentication (SCA) standards now mandatory for all online transactions in Europe, card issuers and banks must implement two-factor authentication for all card payments. Part of the EU’s Payment Security Directive 2 (PSD 2) regulations, SCA is intended to better protect consumers from fraud and abuse, and applies whenever an EU-based shopper makes a payment.
While some exemptions apply, merchants shouldn’t rely on these exemptions when it comes to accepting online payments in Europe. By adhering to the most secure flows, merchants can ensure the highest approval rates and reduce the risk of a transaction being declined due to non-compliance.
Under the previous regulations governing payment security in Europe, a protocol known as 3D Secure 1.0 was used in order to verify digital payments. With the new regulations, 3D Secure 2.0 is an updated version of the protocol that makes it easier to collect and process customer payment information in accordance with SCA requirements.