Home Technology ‘Stronger’ Strong Customer Authentication Boosts Fraud Prevention

‘Stronger’ Strong Customer Authentication Boosts Fraud Prevention

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Payment Service Providers Directive or PSD2 is starting to be used across countries in Europe. Its requirement regarding strong customer authentication (SCA) has posed some challenges for merchants and issuers regarding the effectiveness of the implementation for identity verification. Some factors like high costs and long implementation cycles resulted in high cart abandonment rates in e-commerce.

The requirements for strong customer authentication under PSD2 must satisfy at least two out of the three elements below.

1. Something that is known as such a PIN or a password
2. Something owned, gadgets like mobile phone, laptop and security key
3. Something you are that can be seen through biometrics like a fingerprint or face ID.

These principles behind PSD2’s strong customer authentication regulations are meant for fraud prevention. However, some well-known methods to help ensure strong customer authentication can still be vulnerable to fraud. As not all implementations are created equal, other forms of multi-factor authentication are stronger than others.

However, some fraudulent attacks today still utilize a combination of technical tricks and social engineering to get around the fraud prevention measures of MFA, which is known as the heart of strong customer authentication. The primary means that hackers usually utilize to bypass strong customer authentication include social engineering attacks like phishing, SIM swapping, and malicious accessibility.

When it comes to implementing strong customer authentication, websites and applications can overcome the weakness of passwords and eliminate fraud threats through authentication factors. Combining a device-based authentication factor and a biometric authentication factor can be more potent than any real-time fraud prevention process involving a password.

Issuers, third parties, and online retailers must pay close attention to the points of weakness, particularly strong customer authentication methods, to prevent fraud and other threats to one’s data. For more information about ensuring strong customer authentication to boost fraud prevention, you can head over to Login ID.

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