On 16 October 2019, the European Banking Authority (the "EBA") published an opinion on the deadline for the migration to strong customer authentication (the "SCA") under the Directive (EU) 2015/2366 of 25 November 2015 on payment services in the internal market (the "PSD 2") for e-commerce card-based payment transactions (the "Opinion").
Although the Opinion was addressed to the national competent authorities (the “NCAs”), it is also useful for payment service providers (the “PSPs”), card schemes as well as payment service users, including merchants.
The Opinion follows the earlier EBA opinion published on 21 June 2019 which acknowledged that NCAs may provide limited additional time for e-commerce card-based payment transactions to allow card-issuing PSPs to migrate to authentication approaches that are compliant with the SCA and acquiring PSPs to migrate their merchants to solutions that support the SCA.
Furthermore, following the realisation by the EBAs and the NCAs that many market participants were not ready for transition and implementation of the SCA, the Opinion now sets the deadline for the SCA to 31 December 2020 (instead of 14 September 2019) and prescribes the expected actions to be taken by an NCA during the migration period.
The Opinion additionally recommends NCAs to take a consistent approach toward the SCA migration period across the EU and to require their respective PSPs to carry out the actions set out in the Opinion.
Finally, the EBA recommends that, where required, NCAs shall communicate to PSPs in their jurisdiction that the supervisory flexibility they have exercised does not represent a delay in the application date of the SCA requirements in PSD 2 and the EBA's Technical Standards. Rather, it means that NCAs will focus on monitoring migration plans instead of pursuing immediate enforcement actions against PSPs that are not compliant with the SCA requirements.