ACI Worldwide has announced a number of tools and solution updates to ready payment service providers (PSPs), acquirers, issuers and merchants for strong customer authentication (SCA) and exemptions.
Under PSD2, all electronic online transactions in the European Economic Area (EEA) will require SCA, designed to tackle card fraud and protect the confidentiality of payment security credentials for customers when purchasing goods and services online. From 14 September 2019 onward, all European customers will need to confirm their identity for the majority of their online purchases, using two of the following: something they know (such as a password), possess (a phone), or are (for example their fingerprint). Regulators have indicated a potential extension to the September deadline.
This requirement puts the ultimate decision to authorise a transaction with the issuer, which can force additional authentication protocols - such as 3D Secure 2.0 - that would impact customer experience during card-not-present checkout. However, under the rules, exemptions from SCA are allowed for those that can keep their fraud levels under specified reference fraud rates; this allows payments under certain thresholds to be exempted when transaction risk analysis has been applied.
ACI recently launched a Merchant Guide for PSD2 and Strong Customer Authentication to help PSPs, acquirers, issuers and merchants navigate the regulations. The guide provides insights into how these organisations can protect their customers as well as their own reputations and businesses. ACI has several additional tools, resources and solutions including ACI Proactive Risk Manager and ACI ReD Shield.
In order to comply with PSD2 and strengthen fraud protection, many financial institutions utilise the latest version of ACI’s Proactive Risk Manager, which offers real-time prevention and detection capabilities. The tool can integrate with issuers’ access control servers and PSPs’ and acquirers’ payment gateways to deliver SCA and exemptions in real time.
To qualify for SCA exemptions, merchants and the PSPs that support them need to maintain low fraud rates. ACI ReD Shield is a real-time, multi-layered fraud prevention solution that provides the means to address and minimise risk in the authentication process, while at the same time protect merchants’ genuine customers and maximise conversion. ReD Shield includes machine learning, positive/negative behaviour profiling and consortium data from tens of thousands of global merchants and financial institutions, as well as rule strategies that can be flexed in real-time in a simple tool.
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