UKs Financial Conduct Authority to delay PSD2s SCA, FT reports

Thursday 8 August 2019 10:14 CET | News

The UK’s Financial Conduct Authority is set to delay enforcement of PSD2’s SCA by more than 18 months, after warnings that the rules would threat online sales.

Strong customer authentication (SCA) rules, which are due to be introduced in September 14, 2019, require most online payments to go through an extra level of verification to reduce fraud. In June 2019, the European Banking Authority rejected calls for a continent-wide grace period, arguing that companies had more than three years to prepare.

However, critics of the rules said certain key technical details were not confirmed until this year, and companies have turned to national regulators to plead for more time. Moreover, industry groups said that a lack of preparedness would make more than 25% of payments impossible to complete.

The trade group UK Finance was delegated by FCA to design an alternative timetable for the UK. Its final recommendations, which were agreed with major financial, retail and travel groups, were submitted to the regulator on August 2, 2019.

According to Financial Times, the report said companies should have until March 2021 to implement most of the technical requirements, and a further six months to implement a more advanced form of authentication. Companies in the hospitality and travel sector would receive an additional year to prepare because of the “incredibly complex” nature of their payment systems, the online publication adds.

The FCA, which was consulted throughout the design process, is expected to formally endorse the recommendations by mid-August 2019, and will meet key industry stakeholders on August 13, 2019.

UK Finance and the FCA declined to comment, FT added.

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Keywords: Financial Conduct Authority, PSD2, SCA, online payments, regulation, UK, retail, fraud prevention, EBA
Countries: World

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