SCA is a new European legislative requirement aimed at increasing the security of digital and cashless payments in order to lower their incidence of fraudulent activity.
Multi-factor authentication may be made more secure by including extra checks into the checkout process that are made possible by strong customer authentication solutions.
SCA was first announced in September 2019 with the intention of going into effect in 2020 and 2021. However, because of the COVID-19 pandemic, the financial Conduct Authority requested an extension until May 2021. However, digital payments that are being made now must be SCA-compliant by March 2022 for all businesses.
Elements of Strong Customer Authentication (SCA)
Attributes that should be included in the authentication procedure are as follows:
It’s based on something the user is familiar with. This might include the account’s PIN, credentials, or any other secret key that is needed to get access.
It is an item that the client has or can acquire. Tokens and smart cards are only two examples of devices that might be used.
It is a characteristic of the client. For instance, biometric components such as facial biometrics, speech patterns, and fingerprints are all examples of biometric elements.
There is a greater risk of credit card fraud if no security measures are in place. Organizations must use more robust authentication systems in order to secure card transactions and bank transfers. According to SCA, the one claiming to be a specific person is truly the individual to whom a particular identity was allocated.
User authentication is the process of validating a user’s claim to an authorized identity in real-time to grant access to a digital or electronic asset. If the SCA authentication process is successful, a unique authorization number will be generated, allowing customers to conduct online purchases safely.
SCA Verification Using Biometric Information
Biometric features such as fingerprints, faces, iris/retina, voices, and other individually identifiable physical characteristics are the most reliable means of verifying a customer’s identity. It is now feasible to authenticate online clients making digital purchases thanks to advances in biometric technology on smartphones.
Face recognition systems can identify and verify a user’s identity based on their facial traits. By using biometric verification, we can assure SCA while still providing a frictionless online shopping experience and a high conversion rate for the customers.
With biometrics, customers won’t have to worry about having to remember a lot of different PINs and passwords, and their accounts will be much more secure.
Advantages of SCA
The security of digital accounts and the quality of the customer experience are two of the most pressing concerns in today’s worldwide digitalized environment. As a result, SCA offers the following advantages for effectively dealing with them:
- Minimizes the impact of fraudulent transactions.
- Safeguard e-commerce and digital payment systems.
- Decreases the possibility of online payment fraud and scams.
- Ensure that you comply with the new PSD2 regulations.
- Increases the cardholder’s trust in online payment services.
SCA necessitates modern identity verification procedures that can verify the identification of consumers online in an effective manner, safeguards the digital payments services platforms against an assortment of digital frauds, and enables digital financial enterprises to secure client acquisition coupled with a high online customer conversion rate.
Eliminating Unnecessary Friction
To strike a balance between security and ease of use, you’ll have to carefully implement multi-factor authentication and additional verification steps. This can slow down the checkout process and frustrate customers. A lengthy login process may put customers off, but a lack of security for sensitive information raises red flags.
Thanks to back-end data verification and strong consumer authentication, most online transactions are completed without the user even realizing they have been approved. Customers may leave their shopping carts if they have to go through a verification process, although this is quite unusual.
Dynamic Linking in SCA
When you think about dynamic linking, think of it as a one-of-a-kind code that is generated for a single transaction. When authenticating, this code might be displayed or hidden from the user’s view. The transaction is void if the code has been tampered with.
Authentication must keep an eye on dynamic linking at all times. In the case of an online transaction, the merchant’s name and the amount to be confirmed will show on the customer’s smartphone’s UI.
For security reasons, this must be safeguarded throughout the entire process, including when a user presses the “OK” button and undergoes a biometric challenge.
Protecting an SCA against even the most cutting-edge threats, such as malware installed on the phone’s root, is made easier with dynamic linking protection and a properly configured secure execution environment.
For a company, the consequences of a breach go well beyond only the money they lose; they also include the loss of customers’ trust and harm to their brand’s reputation. SCA techniques will grow quicker, more intuitive, and more widely used as time goes on, and any initial friction will be reduced or even eliminated.