[EU] What is Strong Customer Authentication (SCA)?

SCA, part of European Payments Services Directive 2 (PSD2), is a new rule that comes into effect in Europe which can affect the way your customers authorize payments when paying Wave Invoices with a credit or debit card. This mandate states that any “customer-initiated” online payment must have an additional layer of authentication to be processed. The goal is to increase the security of online payments and protect you and your customers against fraud.

When will SCA come into effect?

Starting on September 14th, banks can decline any card payment that does not meet the requirements for the authentication process. It is anticipated that this will be a gradual enforcement process depending on the cardholder’s region, but the first declines are expected to be seen on September 14th.

Am I affected by SCA?

If you’re located in the European Economic Area (EEA) and your cardholder’s bank is in the EEA, this is applicable to you.

How is Wave supporting SCA?

Wave will be fully compliant with SCA requirements. When your customer goes to pay an invoice, they may be prompted with an additional verification step. Completing this step will allow them to successfully make the payment.

What changes will I see in Wave?

In order for Wave to be compliant with SCA:

  1. You will no longer be able to add credit card information to your customer’s page.
  2. You will no longer be able to add credit card information for recurring invoices when initiating automatic payments. Instead, your customer will need to pay their first recurring invoice online and authorize their card for future payments

What happens if my customer can’t complete the authentication step?

If your customer can’t complete the authentication step, the transaction will be declined by the issuer and your customer will be required to try again.

For further information on SCA, visit Stripe’s website.

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