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The EBA sets new SCA deadline

Hero Eu Hero Eu Placehoder
21 OCTOBER 2019

2 min read

Last week, the European Banking Authority issued an opinion on the SCA grace-periods for online card transactions and also sets a new deadline for the “migration” to SCA. According to the opinion it will be up to local authorities to decide how to enforce the SCA requirement until the new deadline.

On Wednesday 16 October, the European Banking Authority (EBA) published an opinion on the “grace periods“ for Strong Customer Authentication (SCA) that have been issued for online card transactions in many European countries.

In the opinion, the EBA concluded that while the SCA rules are now in effect, local authorities have the flexibility to focus on monitoring “the migration” to SCA rather than on “immediate enforcement actions” on those who are non-compliant. In practice, this means that it is up to local authorities to decide if and how the new rules will be enforced, and that a greater focus will be placed on monitoring the progress of the whole card payment ecosystem as it moves towards full SCA implementation.

In response to one of the most important questions around SCA, the EBA also set a new deadline for when it expects the full migration to SCA to be completed. This new deadline is set to 31 December 2020.

The EBA also made a point of explaining that the new deadline does not impact the new rules around liability that are part of the SCA requirement. For merchants, this means that they take full liability for any transaction that is not done with SCA as a way to protect consumers.

The SCA requirement came into effect on 14 September this year, as part of the new payment service directive, PSD2. But due to low readiness among many actors in the payment ecosystem, especially among online merchants, the EBA allowed local authorities to provide additional time for the implementation on their respective markets.

The authorities in several countries, among them the UK, Germany, France, Finland and Denmark, chose to implement “grace periods” for SCA on online card transactions. With its new opinion, the EBA is now attempting to make the approach more consistent across the EU.