According to Mobile Payments Today, as the mid-September deadline draws closer for a major transition of customer authentication rules for ecommerce transactions in Europe, a growing number of voices are seeking a pause to prevent what they fear could be a logistical nightmare for merchants, banks, payment processors and consumers.
The issue involves the transition to Secure Customer Authentication, a move by European regulators under what is called the second Payment Services Directive (PSD2) to lower the risk of fraud as more consumers make purchases through ecommerce channels.
Essentially future purchases will require all transactions to be authenticated using two of three authentication methods:
- Something a customer knows, like a PIN code or password.
- Something a customer has, like a smartphone or token.
- Something that uniquely identifies the customer, like a fingerprint or facial recognition.
“The PSD2 directive has faced strong opposition in the market as the timeline to implement a solution with the complexity of the new Strong Customer Authentication rules for ecommerce transactions has always been seen as a challenge,” Scott Edington, CEO of Deep Labs told Mobile Payments Today via email. “The two-step verification process, with many requirements within that new process, requires a high degree of technical and security knowledge and time to build and put into production that new process.”
The San Francisco-based digital security firm has used artificial intelligence to develop solutions to meet the new PSD2 requirements. In March, for example, it launched “Deep Identity” to track transactional risk analysis, which leverages data signals and context aware machine-learning to help confirm risk levels.