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UK again delays new payment authentication standards

By Amon Cohen BTN

The UK will delay by six months the introduction of tough new payment verification requirements that will affect many business travel users of plastic corporate cards, the country's Financial Conduct Authority said. Mandatory application of Strong Customer Authentication in the UK will now be enforced from 14 September 2021, owing to the "exceptional circumstances of the Covid crisis", according to the FCA.

SCA is a European Union initiative that the UK signed up to before its departure on 31 December 2019. Remaining EU members are scheduled to enforce SCA from 31 December 2020 but face strong lobbying from the payments industry to delay as well.

SCA is intended to reduce online fraud by requiring cardholders to present additional authentications at the point of purchase, such as a PIN number, a one-time password sent to the cardholder's phone and biometric identification.

The new rules will make it impossible for plastic corporate cards to be used by anyone other than the named cardholder, thus ending shared usage for travel payments in many businesses. It also will become impractical for travel management companies to pay for travel bookings on public websites, such as those for low-cost carriers, with the stored details of travellers' plastic cards. There are even question marks over the future of European TMCs paying in this way for bookings made via global distribution systems. In contrast, lodge and virtual cards are exempt from SCA.

This is the second delay in the UK to enforcement of SCA, originally scheduled to become mandatory throughout the EU in September 2019. The European Banking Authority extended the deadline because of poor readiness among issuers and merchants.

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