EU’s second payment services directive (PSD2)
has remained a challenge for financial services firms due to
market fragmentation as well as technological issues, such as
application programme interfaces (API) and strong customer
Market participants remain concerned about these issues,
which they fear are hindering the success of the directive,
which is intended to increase competition and customer
"A key challenge remains the roll-out of strong customer
authentication, particularly for the ecommerce industry" said
Linklaters UK head of fintech, Richard Hay, who added that
fintechs are cross-border by nature, which makes fragmented
regulatory approaches particularly difficult.
SCA is intended to reduce fraud by making online payments
more secure. The
regulatory requirements state that payment
services’ authentication procedures need to
include mechanisms that detect attempts to use personalised
security credentials that were lost or stolen.
Banks are slow to embrace crypto and
SCA requires authentication to...