EBAs proposals on SCA might harm consumers and PSPs – PIF says

The move follows the latest EBA proposed Regulatory Technical Standards on Strong Customer Authentication under PDS2 that introduces disproportionate security requirements to the detriment of consumers, merchants and issuers of prepaid products.

As a result, PIF has added its signature to a letter to Vice-President Dombrovskis at the European Commission. The letter, which has been signed by 39 European and national organisations representing the payments, cards, ecommerce, small merchants, ICT and digital technology, telecoms, foreign trade, and leisure and travel industries, questions the EBA’s prescriptive approach by mandating strong authentication for all remote payment transactions over EUR 10, regardless of their risk.

The letter details concerns that the EBA’s proposals “diverge from its mandate under PSD2 by not allowing for the risk-based approach to authenticate customers and authorise fraud” and “will result in an increase in consumer harm by reducing customer trust in their payment methods, the choices open to them and restricting competition.”

Further, the letter includes open-source evidence to argue that risk-based authentication has been used successfully by the payments industry for many years and is already effective at reducing fraud.