European Cards Industry in 2020 and Beyond. Do we Need Oversight Coordination?

European Cards Industry in 2020 and Beyond. Do we Need Oversight Coordination?

PSD2 SCA has been one of the most discussed topics for merchant payment professionals before and after its implementation deadline, on September 14, 2019. What are the lessons learned from the PSD2 SCA implementation project so far?

What has happened in 2019?

  • January – September 14: Many industry players have advocated before September 14 for a pan-European migration plan that is consistent, harmonized and effective across all member states.
  • June 21: In view of the complexity of the enforcement, on June 21, 2019, the European Banking Authority (EBA) granted national Authorities the possibility to postpone the 14th September deadline in order to allow the implementation of new authentication tools by all customers, with exclusive reference to the online card payments.
  • June – October:  Several NAs announced different migration plans, so there is a risk of differences in implementation. If that happens, it will be difficult, expensive and time-consuming for payment providers and merchants to prepare their solutions.
  • October 16: the European Banking Authority (EBA) published another Opinion on the updated Payment Services Directive (PSD2) and in particular its provisions on Strong Customer Authentication (SCA) (see here). The Opinion recommends that national competent authorities (NCAs) grant issuers and acquirers (PSPs) until 31 December 2020 (i.e. a 15-month extension) to comply with the SCA requirements for remote card-based payments, subject to compliance with certain intermediary milestones.

MPE 2020 conference team interviewed different merchant payments industry professionals before and after September 14 and October 16 to bring the feedback of the merchant payments ecosystem. What are the key lessons learned from the PSD2 SCA implementation project so far?

…. Coordinated approach is needed….
…. The installation of a program management office needs to happen…
…. there is a need to reorganize oversight of this industry.
… a lack of consistent communication with consumers and a general failure to prepare merchants for the impact of SCA in eCommerce…

Alan Moss, Head of Fintech & Payments BluSpecs & MPE 2020 conference moderator commented on: What now needs to happen to make the transition a success after October 16?

"The 14th of September deadline certainly provided a sharp focus on SCA implementation for merchants and service providers alike, with a real threat of business disruption as the cliff-edge drew near. In the end, the deadline came and went without any significant problems being reported in eCommerce traffic.

Given the apparent unwillingness of the EBA to recognize the potential chaos that could ensue from a literal interpretation of its deadline, local banking regulators (or NCAs), had begun to take matters into their own hands. A series of national pronouncements followed, which seemed to vary from strict adherence to the original deadline in the case of Denmark, to a 3-year migration period set out by France.

Finally, on the 16th of October, the EBA published its own opinion, effectively granting a 15-month extension, and setting out a very detailed implementation plan to be followed by issuers and acquirers/PSPs, and enforced by local regulators. This certainly adds to the confusion, given that many regulators had already communicated plans which are now at variance with the opinion of the EBA. As a result, there is still the possibility that SCA implementation is implemented according to different schedules and with varying degrees of policing in the various European nations.

On top of this, there remain some doubts about the ability of merchants to have fully compliant and working solutions in place by the revised EBA deadline: SCA is dependent on the adoption of the new 3DS V2.2 specification, which will not be mandatory for issuers until September 2020, according to at least one major scheme. Testing will then be in progress right through to March 2021, so in my opinion, there’s little chance that all merchants will be fully SCA enabled and PSD2 compliant by the end of December 2020."


You can read full interviews with 14 different industry professionals in the report "SCA transition plans across Europe & industry perspectives". To download the report please visit: MPE

Join MPE 2020 conference, Berlin, February 18-20 to learn from different industry stakeholders about

-  what needs to happen to make the SCA transition a success after October 16? and

-  if there is a need for a coordinated oversight of the card & merchant payments industry in Europe.

MPE 2020 is Europe’s Largest Merchant Payments conference.

1250+ attendees, including 300+ merchants, 400+ acquiring banks & PSPs from 40+ countries come to network and be inspired by 140+ TOP industry speakers, 75+ solution providers.

MPE is renowned for its high-caliber networking at its core and the agenda covering all aspects of payment acceptance, latest regional and pan-European trends; in-depth industry analysis and specific case studies.

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