The mandatory implementation of Strong Customer Authentication in the United Kingdom for e-commerce payments, including for many business travel bookings, has been delayed by an additional six months to 14 March 2022, the country's Financial Conduct Authority announced on Thursday.
SCA is designed to eliminate fraud through an additional verification process by the cardholder, such as entering a one-time passcode sent to their mobile phone. It is required in many cases for online reservations, including via corporate booking tools, when the booker pays with a plastic card, though not with lodge or virtual cards.
Most European Economic Area countries made SCA mandatory on 31 December 2020. The UK committed to introducing SCA before it left the European Union, but this is the third time it has delayed mandatory implementation beyond an original deadline of September 2019.
The FCA said "this further six-month extension is to ensure minimal disruption to merchants and consumers, and recognises ongoing challenges facing the industry to be ready by the previous 14 September 2021 deadline."
The news was not welcomed by Amadeus head of commercial payments Jeremy Dyball, who urged travel providers to push ahead with implementation. "The FCA's additional six-month delay to enforcement timelines is designed to relieve pressure for the digital commerce world," he said.
"However, in my view, the travel industry needs to move ahead as quickly as possible with SCA. In addition to now being a legal requirement in the EU, SCA is already being implemented by card issuing banks in the UK as well, so any travel company looking to maximise bookings must ensure it is SCA-ready in order to ensure the highest possible acceptance rates. Any delay in delivering SCA could result in lost sales at a time when every booking counts."
Institute of Travel Management CEO Scott Davies, however, is of the opposite view.
"We welcome the decision by the FCA to extend the deadline for implementing Strong Customer Authentication for e-commerce transactions for a further six months," he wrote to BTN Europe in an emailed statement. "It's gratifying to see that the FCA has recognized that there are still several challenges and issues which need to be resolved."
PSD2 presents unique complexities in the business travel sector, he added. He pointed out that ITM's PSD2 Taskforce has made progress over the last three months, working with stakeholders and helping members and the industry ecosystem make sense of those.
From that vantage point, Davies said, "Implementation of SCA is like a relay race as everyone in the supply chain needs to be in place to pass the baton, because so many business travel transactions have several intermediaries in the payment journey. This extension will give all those in the chain much-needed time to ensure no one drops the baton."
This article was updated on 24 May 2021 at 14:56 BST to reflect the comments of ITM CEO Scott Davies.