The European Central Bank estimates Europe suffers from €1.3 Billion in online card fraud each year. That’s why the Payment Services Directive 2 (PSD2) and the Regulatory Technical Standards (RTS) mandate what is known as Strong Customer Authentication (SCA).
This will introduce two-factor authentication for most electronic payments made in the European Economic Area (EEA). Against this backdrop, Amadeus has collaborated with CyberSource, Visa’s payment management platform, to offer the global travel industry a range of advanced fraud and payment management capabilities.
Preparing for Strong Customer Authentication
From the outset, this collaboration will help travel merchants prepare for SCA, reduce fraud risk, and minimize the potential impact on customer experience with the introduction of two-factor authentication.
The RTS stipulate that, for the majority of electronic payment transactions within the EEA, the payer will need to prove their identity using at least two of the below techniques:
• Something the payer knows (e.g. PIN)
• Something the payer has (e.g. SIM card or mobile device)
• Something the payer is (e.g. fingerprint)
To help support SCA requirements, CyberSource’s 3-D Secure (3DS) 2 authentication solution is being integrated with Amadeus’ payment platform. 3DS 2 includes significant enhancements that lay the foundation for travel merchants and their banking partners to support SCA, without sacrificing a quick and simple payments experience. Specifically, 3DS 2 means:
• Travel merchants and banks involved in payments can exchange significantly more data, which supports improved risk assessments. This can help to reduce instances where travelers are asked to practice two-factor authentication, meaning less payment friction
• Native support for ‘in-app’ authentication on mobile devices (coming with 3DS 2.2)
• Ability to request specific exemptions included in the SCA requirements (coming with 3DS 2.2)
Justin Fraser, Head of CyberSource Europe, commented: “The travel industry, like so many, is facing a new era shaped by new technology and regulation. This is coupled with the changing demands of consumers, who are expecting to interact and transact with ease. It’s critical to offer a seamless payment experience, while meeting new regulatory requirements and delivering effective authentication and fraud management. Travel merchants that have the right technology in place will be in a stronger position to optimize exemptions under SCA, manage fraud, and ultimately deliver on traveler expectations for simple and secure travel payments.”
Bart Tompkins, Managing Director, Payments, Amadeus, added: “In a world where payments are increasingly mobile and travelers expect to pay with a single click, it’s essential merchants keep the overall experience in mind when implementing SCA.” He continued: “By working closely with the CyberSource team, we have committed to delivering the benefits of the new 3DS 2 protocol across our solutions and the wider travel ecosystem—laying the foundation for simple and efficient two-factor authentication by harnessing innovations such as biometrics.”
The Bigger Picture
As part of Amadeus Payments’ offering, a range of CyberSource’s payment, fraud and authentication management solutions will be made available to the worldwide travel ecosystem.
Appropriate fraud screening helps provide travel merchants with the confidence to pursue various exemptions under SCA, putting them in a stronger competitive position. CyberSource fraud management capabilities are backed by machine learning insights from billions of Visa and CyberSource transactions annually, for greater accuracy and early detection of fraud—as well as consumer authentication services by CardinalCommerce.