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Full implementation of SCA for online card payments fast approaching

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By 31 December 2020, online shops must fully support the EU guidelines for strong customer authentication (SCA) on online card payments. From October, card issuers will increasingly reject online card payments without two-step verification under the European SCA guidelines, for progressively lower amounts.

Three icons show steps of strong customer authentication: confirming payment, biometric verification and entering a password.

The EMV 3-D Secure (3DS) standard for SCA on card payments enables cardholders to be verified quickly and securely, for example with a simple fingerprint or mobile PIN. Card issuers will approve payments with 3DS verification much more often.

If you operate an online shop and do not yet comply with the SCA guidelines, contact your payment service provider as soon as possible. Online shops that fail to adapt their card payment processes in time will see online credit card payments rejected more often during the busy shopping period ahead of the holidays.

Allow enough time for thorough testing

Online shops that switch to 3DS early can test it extensively and without pressure while immediately benefiting from higher conversion. The latest version, which all Dutch credit card issuers will support during October and which offers the best customer experience, is 3DS v2.1 or later. After 31 December 2020, virtually all online credit card payments without 3DS will be rejected irrevocably unless an SCA exemption is available.

Where does the Netherlands stand?

By 1 January 2021, every link in the online card payment chain in the Netherlands must fully comply with the EU guidelines for SCA. The European Banking Authority (EBA) previously postponed the deadline for introducing SCA by 15 months, and it will not be postponed again. At the beginning of September 2020, all Dutch credit card issuers, transaction processors and payment institutions were fully on schedule to meet the deadline.

Roadmap for the introduction of strong customer authentication for online card payments in the Netherlands

Dutch card issuers are not yet systematically rejecting online card payments without SCA. From October 2020, however, online card payments without SCA, known as legacy transactions, will increasingly be conditionally rejected with so-called soft declines. In that case, the online retailer can resubmit the payment with SCA using the 3DS standard.

During October, online shops will also be able to invoke exemptions from SCA for online credit card payments. An exemption is possible for low-value payments (LVP) of up to €30. For higher amounts of up to €500, an exemption may also be possible if the card issuer assesses the transaction risk as low, under Transaction Risk Analysis (TRA). Online retailers can ask their own payment service provider whether they qualify for exemptions and what is required.

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