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SCA readiness: building infrastructure for regulatory compliance

Will Gaybrick on April 23, 2019

Starting in September, new regulatory requirements called Strong Customer Authentication (SCA) will be rolled out for businesses who have customers in Europe. SCA is a pillar of the EU’s second Payment Services Directive (PSD2) and will require two-factor authentication on most payments made by European customers in an effort to decrease online fraud. Complying with SCA will be complex, as it will be implemented differently by individual banks and payment providers across Europe. And beyond the compliance burden, these new rules will also come with a cost—the new authentication step can add friction to checkout, reducing conversion.

Spurred by SCA and other similar global regulations on the horizon (the requirements of SCA resemble those in India, and similar rules have been proposed in Australia, and other countries globally), we’ve upgraded our products across the board in order to help insulate businesses from this complexity and to minimize the impact on conversion. As soon as SCA is mandated, our payments platform will analyze each transaction to ensure that additional authentication is requested only when it’s required. And when it is required, we use new technologies to make the authentication as user-friendly as possible. Our new SCA-ready products and updates include:

  • The new Payment Intents API to help businesses more easily build fully customized, dynamic payment flows that are ready for SCA
  • A new version of Stripe Checkout that can dynamically detect when SCA is required and trigger authentication when necessary
  • Support for 3D Secure 2, one of the easiest ways to authenticate purchases for SCA, with support for in-checkout authentication flows and biometric verification
  • Updates to Stripe Billing with SCA-ready subscription and invoicing tools that will automatically capture authentication for recurring payments and apply exemptions when possible

In the coming weeks, we’ll be rolling out tools in the Stripe Dashboard for businesses already using Stripe to help you prepare for SCA. You can also get started by reading the docs and our guide on building SCA-ready payment flows.

Stripe exists to grow the GDP of the internet. Simply put, this means making it easier for businesses to transact with customers anywhere in the world. Increasingly, fulfilling this mission entails helping our users overcome the challenge of navigating a payments regulatory landscape that is becoming both more complex and more Balkanized. To make this transition easy for businesses built on Stripe, we’re making our products more powerful and dynamic than ever before. We’ll be making a host of additional improvements to our products in 2019 to help our users prepare for regulatory changes, ensuring that operating a global internet business is as easy and as seamless as possible.

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