FCA promises to make EU payment rules work for small firms
The Financial Conduct Authority has announced that it is developing a ‘migration plan’ concerning new EU payment rules, known as Strong Customer Authentication, due to take effect later this year.
In a statement issued late last week, the Financial Conduct Authority (FCA) stresses that it will not take enforcement action against firms if they do not meet the relevant requirements for SCA from 14 September 2019 - the existing enforcement date.
SCA measures require shoppers to provide two types of authentication – for example a password alongside a code received by text – in order to make online purchases with a transaction value of more than 30 euros.
Responding to the announcement, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said it’s encouraging to see the FCA listening to concerns about SCA.
"Of course it’s right that consumers have maximum protection against fraud, but enforcing change of this magnitude before everyone’s fully prepared for it will be bad for shoppers and small businesses alike," Mr Cherry stated.
He noted the FSB will be working with the regulator to ensure necessary awareness levels have been reached before enforcement action starts.
"Small firms will need at least 18 months to adjust to these new rules," Mr Cherry cautioned.
“We’re a few months from roll-out and most small business owners have never even heard of SCA, let alone understand how it will impact their firms,” he added.
Late last week, the FCA said it aims to quickly agree a plan with stakeholders across the industry that encompasses a blueprint for compliance and readiness, a timetable for achieving this, and key milestones and targets to deliver improved security of customer authentication and fraud reduction along the way.
"We will work in close cooperation with all the industry stakeholders and other authorities, including the Payment Systems Regulator, to ensure delivery of the blueprint at pace."