Payment Services Directive (PSD) compliance & 3D Secure v2

DateTuesday, 17 March 2020

As of the September the 14th 2019 new rules came into place for transacting within the European Economic Area (EEA) under legislation known as Payment Service Directive (PSD) 2. This new legislation has a specific focus on payments through it’s regulations on Strong Customer Authentication (SCA) .

SCA can be broken down into 3 components. Knowledge, Possession and Inherence.

Knowledge ‐ Something your customer knows (e.g. PIN code, password)

Possession ‐ Something your customer has (e.g. credit card, electronic device)

Inherence ‐ Something your customer is (e.g. fingerprint, face)

SCA states that for a transaction to be compliant under the new rules a transaction must have met atleast two of the above three components. These are commonly known as two-factor authentication (2FA) or multi-factor authentication (MFA).

There are certain exemptions to these rules which include Low Value Transactions (under €30 each), fixed amount subscriptions, merchant-initiated transactions, trusted beneficiaries, MOTO and commercial payments.

You can read more on the guidelines here.

Windcave has addressed the need to support SCA by implementing 3D Secure v2. 3D Secure v2 is a new version of the original 3D Secure solution that was originally deployed in 2001. It offers an improved user experience by removing static authentication and unnecessary redirections to external sites.

The improved user experienced is achieved by making use of dozens of data points gathered from the cardholder, merchant and acquirer, to make real-time decisions about the likelihood of fraud. If a transaction does need to be verified by the cardholder new authentication techniques like One Time Password (OTP) and Biometrics provide the ability to verify the cardholder seamlessly in any digital environment.

The Windcave 3D Secure v2 solution is built into our Payment Session APIs (REST, PxPay, PxFusion) allowing for a seamless transition from 3D Secure v1 to 3D secure v2. Windcave is automatically upgrading merchants once their acquirer is fully certified to support 3D Secure v2.

For more information on 3D Secure v2 check with your acquirer or contact the Sales team