The Financial Conduct Authority (FCA) has announced another six month extension to the deadline for implementing Strong Customer Authentication (SCA) for card-based e-commerce transactions. The new deadline is now 14 March 2022.
This is the latest in a series of extensions to a deadline that was originally set for 14 September 2019. The FCA has provided a variety reasons for delay, but the simple fact is that the industry has just not been ready. Compared to the UK, the EU has been much less forgiving when it comes to implementing SCA. The FCA’s approach of continual extensions has not been reflected across the channel, nor the Irish Sea, as the EU set a deadline for full compliance of 31 December 2019.
WHAT SHOULD FIRMS DO?
If firms have been paying attention to the UK Finance implementation plan from November 2020, they should be well on their way to SCA compliance for card-based e-commerce transactions. As a result, they are advised to continue on the same path. As the extension requires that firms be operationally effective and compliant with SCA measures by 14 March 2022, it is advisable to implement these measures as soon as is practicable. If your firm provides payment services that include card-based transactions and you are yet to implement these measures, this is your opportunity to accelerate development to ensure compliance.
To add some context, the UK Finance implementation plan is currently coming to the end of Phase 2, market readiness, where issuers and e-merchants/gateways are in build and test phase ready for live testing. This has been referred to as the gradual ramp-up phase. Phase 3, the full ramp-up, is due to start 1 June 2021. This includes the gradual activation to avoid a cliff edge for implementation by 14 September 2021. As the 14 September cliff edge no longer exists, firms should keep their eyes peeled for an update from UK Finance. It may be the case that UK Finance keeps a stricter timeline of 14 March 2022 to ensure market readiness.
HOW CAN WE HELP?
SCA, including the available exemptions, can be difficult to wrap your head around. As leading compliance consultants within the payments space, we are here to help. We can review all payment flows and customer journeys to ensure you are applying SCA in all necessary instances, in line with the requirements of Regulation 100 of the Payment Services Regulations 2017. This can be delivered as a discrete project or as part of our ‘PSD2 Assurance Review’ service. If you require guidance and would like to find out more information, please do not hesitate to get in touch.
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