Regulatory obligations

In 2018 the implementation of the European regulation PSD2 (Payments Service Directive 2), an evolution of the previous PSD, updated the previous payments regulation within the EU, extending it to new types of payment and consequently improving the protection on the security of consumers. 

The implementation of PSD2 therefore entailed the introduction, in September 2019, of new technical regulations, including the rules on authentication for online card payments, with the aim of increasing the level of security of transactions to fight the increased fraud risks for consumers. The first regulation introduced is the Strong Customer Authentication (SCA), which provides for the mandatory implementation of a strong customer authentication phase with two or more factors for the transaction. The application of the SCA is possible thanks to the 3DS protocols in their version 2.0 and later, which replace the old 3DS version in compliance with the regulatory obligations established by the European legislation and defined by the ECB (European Central Bank). 

The SCA and consequently the application of the 3DS 2.0 and subsequent protocols have become mandatory for all European online transactions starting from January 1, 2021. After the introduction of this legislation, merchants are required to modify their systems in order to manage the Strong Customer Authentication and the 3DS 2.0 and subsequent security protocols, and therefore process transactions in accordance with PSD2, protecting your business and customers. 

If you wish to learn more about the topic, you can download the whitepaper "Strong Customer Authentication and conversion rate in Europe in 2021"