What is Strong Customer Authentication (SCA) and how will it affect eCommerce?

The consequence for eCommerce retailers is that they will need to ask for more customer details during the payment process or when someone tries to access a payment account to verify the identity of the person in question. Furthermore, the FCA (Financial Conduct Authority) has outlined that this authentication should not come at the expense of certain customers, which is to say that it cannot exclude those who may not use mobile phones or computers.  

When does SCA apply and what else has the FCA said about them?  

SCA applies whenever someone tries to:  

• make an online payment  
• access an online payment account   
• takes any action that implies a risk of payment fraud (with certain exemptions).  

The FCA has stressed that although it is asking for further identity authentication to be added to customer journeys and experiences, it wants businesses to minimise the disruption to customers as much as possible.   

When is the deadline to comply with SCA?  

The FCA initially stated that firms needed to comply with SCA requirements by March 2020. However, in response to concerns regarding the time needed for implementation amid the pandemic, the deadline for full compliance was extended to 14 March 2022.   

Any organisation that does not comply with SCA requirements may be subject to fines as well as “...supervisory or enforcement action, where appropriate.” Furthermore, those organisations that do not comply with SCA requirements run the risk of having their customers’ transactions declined.  

How can eCommerce retailers comply with SCA?  

Online retailers need to apply additional means of identity authentication for customers that do not rely on mobile phones or computers. The most logical means of doing this is phone validation because it covers the most substantial number of customers. Any companies that cannot offer phone validation or whose customers are unlikely to be able to carry out phone validation have been asked to contact the FCA directly.  

What are the benefits of phone validation?  

When authenticating the identity of customers, there are several benefits to employing phone validation solutions:  

• Real-time accuracy and complete coverage – international landlines and mobile numbers are never cached, so they are always up to date.  
• Frictionless journeys – customer journeys and experiences are kept as smooth as possible with fast and reliable service.  
• Flexible solutions – validate details wherever works best for you, be it at the point of capture or in a batch cleanse.  

Loqate’s phone validation solution also uses external datasets to go beyond simple syntax and format checks, and it can also run liveness checks on UK mobile numbers to see if a number is active and likely to be in use.  

Want to hear more about our phone validation solution? Contact one of our product experts now, and they will advise you on how we can prepare you for March 14.   

Get in touch now