E-commerce: the new authentication system for online transactions is coming
PSD2, a European regulation on payment services created to increase the security of online transactions and fight against fraud through the strengthening of the authentication system, has entered into force on January 13, 2018,
Before above regulation, 3-D Secure consisted in authentication of the cardholder used for a purchase using a unique code sent via SMS.With the mandatory introduction of 3-D Secure 2.0 authentication will take place through two different ways: strong authentication and frictionless authentication.
The first is to further strengthen traditional safety procedures by combining at least two of the following factors:
- Knowledge. Something that the user knows, such as a password.
- Property. Something that the user owns, like a PC or a smartphone.
- Inherence. Something that the user is, which can result by using fingerprint or facial recognition.
The second, on the other hand, does not propose to the user the 3-D Secure 2.0 security procedures because the communications between the main players involved in the transaction will be improved: banks and payment solutions.They will automatically and more efficiently exchange some basic data, such as the delivery address or billing address.
How to choose one mode rather than the other? Simple!Analyzing the risk associated with the user’s transaction the payment solution will automatically decide which of the two is better to apply.The introduction of these new security rules will significantly reduce the risk of scams related to online transactions, making e-commerce a safe and controlled reality and ensuring users a positive and serene experience.