Stripe APIs Simplify SCA For Merchants, Issuers

Stripe has announced the launch of new products and updates that will help merchants implement the best Strong Customer Authentication (SCA)-ready authentication methods ahead of the September SCA deadline.

SCA, a new regulatory requirement to reduce fraud and make online payments more secure, goes into effect in Europe on September 14. Once it is implemented, more than 300 million consumers will need to confirm their identity for most of their online purchases using two of the following: something they know (e.g., a password), possess (e.g., a phone), or are (e.g., their fingerprint).

“SCA is a ticking time bomb for the European payments industry. Merchants must deal with a complex set of changes to the payment flow that can have a disruptive impact on the customer experience. Yet, awareness among merchants is low,” Ron van Wezel, Senior analyst at Aite Group, said in an emailed press release. “Payment service providers are at a turning point. SCA is simply too complex for any merchant to manage on its own, including for large online businesses. Payments providers who can abstract away SCA complexity will have a significant advantage over their competitors.”

The new Stripe products aim to make SCA easier to implement for online businesses with Payment Intents API, which will enable businesses to design their own SCA-ready payment forms, as well as accept the best authentication methods through a single integration: Checkout, which is a pre-built payments page optimized for SCA that merchants can integrate with a few lines of code; and Billing, a suite of tools for subscription businesses.

The company will also supply support for SCA exemptions on low-risk transactions, scanning every transaction to trigger SCA only when required.

In addition, Stripe announced that it has acquired Dublin-based Touchtech Payments, a software company providing advanced SCA-ready authentication technology for some of Europe’s leading FinTechs and challenger banks.

“On the modern internet, payments should be everything you’d expect: easy, secure, and fully compliant with the latest regulations. Unfortunately, these three attributes are often at odds with one another, making it nearly impossible for an individual business to keep pace with regulatory changes and build a great payments product experience for their customers,” said Will Gaybrick, Stripe’s chief product officer. “Touchtech adds yet another layer to the economic infrastructure Stripe is building for the internet, which is designed to help businesses comply not only with SCA but also with the entire next generation of regional payment regulations.”


Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.


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