This latest in a series of Elavon guides to navigating PSD2 SCA regulations provides merchants in travel and hospitality, and their solution providers, with a guide to mastering transaction optimisation.
Payment Services Directive II (PSD2) regulatory enforcement of Strong Customer Authentication (SCA) is widespread across the European Economic Area (EEA) since the passing of the December 2020 deadline. UK enforcement has been delayed until 22 March 2022. However, the modified ramp-up commenced as planned on 1 June 2021.
Throughout the EEA and the UK, card issuers will be required to decline all non-SCA-compliant transactions once ramp-up to full adoption concludes in each jurisdiction. All merchants, booking agents, suppliers, acquirers, gateways, and issuing banks or payment service providers must be ready to support SCA.
In a previous guide, we shared with you some of the unique challenges that the introduction of SCA presented to the travel and hospitality (T&H) payments and customer experience ecosystem. We explained what the industry has been doing to address the known ‘air gap’ in the T&H sector on your behalf.
Without the required technical guidance provided by any regulatory authority, you were introduced to the industry-agreed ‘interim solution’, enabling the continued use of merchant-initiated transactions (MIT) but without ‘proof of authentication’ until such time as guidance became available and upgrades could commence.
We now have a situation where businesses in the UK and Europe are reliant upon transactions that might originate on infrastructure ordinarily considered as ‘beyond the scope of EU regulations’. However, as these transactions form part of the customer sales engagement cycle and therefore require ‘proof of authentication’ that can only result from SCA being applied ‘up front’, non-EU (EEA/UK) players and their infrastructure now come into scope and must be engaged in upgrade decisions.
This guidance is being provided for T&H merchants and their solution providers to help you take the necessary steps to comply with the SCA regulation and new rules. This update provides the specific detail required to satisfy the requirements of participating schemes, card issuers and merchant acquirers, enabling you to bridge the T&H ‘air gap’ with future-ready technical guidance for compliance to PSD2 SCA, using transaction treatment use-cases supported by card-scheme operating rules and frameworks.