Get ready for Strong Customer Authentication: What you need to know about the new online payment rules

The rapid growth and convenience of buying online is one pandemic habit that looks set to stay for the long term.

The rapid growth and convenience of buying online is one pandemic habit that looks set to stay for the long term.

While the shift to e-commerce has been gradually building over the past decade, it grew exponentially over the past couple of years, with online sales representing an increasingly large part of many businesses’ operations.

According to the ONS, internet sales as a percentage of total retail sales was the highest it’s ever been: at 37.7% early last year.

Dan Edelman, General Manager, UK Merchant Services, American Express explains that as a result, ensuring your e-commerce operation is running seamlessly is more important than ever before. This is particularly the case for smaller and independent retailers, which often don’t have the resource to open multiple stores but can reach new customers and grow their business by selling online. In fact, the American Express Global Business Spend Indicator revealed that for Q3 2021, some 44% of UK businesses planned to increase investment in e-commerce technologies.

Against this backdrop, it’s vital that all businesses selling online are aware of the new industry-wide requirements coming into force very soon. Strong Customer Authentication (SCA) is being introduced to help increase the security of online payments. With a technical name and imminent enforcement deadline for e-commerce of 14 March, it may feel an intimidating prospect. But solutions such as SafeKey, American Express’ checkout security technology, protects customers against fraud when they pay online.

There’s no time for delay, so read on for what you need to know about on SCA:

What is Strong Customer Authentication?

SCA features a two-factor authentication process designed to add an extra layer of security when anyone makes a payment online. Its implementation requires merchants and Payment Service Providers (PSPs) to work together with technology suppliers, Card issuers and many others to deliver SCA in a way which works well for customers.

When do I need to implement it?

The enforcement deadline for e-commerce is 14 March – but the rollout has already begun and is rapidly ramping up. This means that more and more of your transactions risk being declined in the coming weeks if you don’t have an SCA-compliant checkout – which could result in valuable lost sales.

Why is it being introduced?

SCA is part of the Payment Services Directive 2 impacting all merchants European-wide that accept card payments. The latest figures from UK Finance reveal that the level of fraud and economic crime is on the increase – so SCA will play a crucial role in not only protecting your customers from fraud, but your business, too. Implementing SCA protection, such as SafeKey, transfers liability for fraud chargebacks on SCA-authenticated and attempted transactions to the Card issuer (us at American Express).

What can I do to be SCA-ready?

The time to act is now, with the first step to talk to your Payment Services Provider or Payment Gateway to ensure that you are using American Express’ SafeKey, which leverages the global industry standard, EMV® 3-D Secure, to detect and reduce online fraud. This enhanced protection may give customers more confidence with their online spending. It will also save you time and resources – which we know are crucial for many small businesses.

I’m concerned about making the checkout process too complex

The checkout process is kept simple as American Express’ smart anti-fraud technology works in the background and checks each online transaction against hundreds of data points. This means that the levels of challenge rates can be minimised whenever possible – ensuring a friction-free purchasing journey and, in turn, reducing basket abandonment.

How will this affect my regular customers?

We know the importance of maintaining and preserving good relationships with your most loyal customers. SafeKey allows customers to add their favourite merchants to their ‘Express List’ via the Amex app – meaning they don’t have to spend time verifying their purchase, allowing them check out faster without compromising security.

To find out more about how American Express can help your business get SCA-ready, visit: