The GDRP (General Data Protection Regulation), PSD2 (Second Payment Services Directive), and new regulations of the European Union require secure data handling and transactions along with a good customer experience. More particularly, PSD2 needs SCA (Strong Customer Authentication) processes in place. It has dictated two-factor authentication for ensuring safe payment approvals are in place. Well, the meaning of two-factor authentication is the process of identification of a customer’s authentication based on two or more elements from possession, inherence, and knowledge.

Introduction to PSD2

PSD2 is the Payment Service Directive’s 2nd revision which is meant to develop the financial industry and online payments market in the European Union. It highlights the essential requirements necessary to fulfill for businesses to use open banking/ bank payment as well as 2-factor authentication services to boost security in online payments in the best possible way.

Even though the PSD2’s SCA implementation was a halt on electronic payments because some organizations were having difficulty in implementing the mechanism of 2-factor authentication for a certain period. However, the implementation’s end date was set 31st December 2020 by EBA in Europe.

How PSD2’s SCA requirements can be achieved with biometrics?

Multi-factor authentication is meant to provide an additional security layer when making any online payment. However, now financial service providers or companies using online payment have to integrate biometric configuration to comply with the two-factor authentication requirements of SCA.

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