FCA extends SCA deadline by a further six months

In light of the ongoing Covid-19 pandemic and its widespread disruptive impact, the UK’s Financial Conduct Authority (FCA) is to delay the implementation of strong customer authentication (SCA) methods by six months from 14 March 2021 to 14 September 2021.

The announcement comes amid mounting pressure from the payments industry to further delay the implementation of SCA and on the back of an acknowledgement from the EBA in April as to the difficult environment and challenges that COVID-19 has presented to global commerce, including retailers and payment services providers.

Further pressure to delay the deadline, derived from a recent letter to the European Banking Authority (EBA) from the European Payments Institution Federation. The letter called on the EBA to extend the deadline, as the exceptional circumstances of the COVID-19 crisis has led to a lack of capacity and resources of both payment services providers and merchants to process SCA development, especially as merchants have had to focus their efforts on business continuity and supporting consumers through this crisis. 

The FCA’s lead on the matter in delaying the implementation of SCA is expected to be followed by other regulatory authorities across Europe, which may trigger further commentary from the EBA on the issue.

What’s next?

As a result of the delay, the FCA has announced that UK Finance will work with all stakeholders across the payments industry to discuss a phased implementation plan to be agreed with the FCA for the industry to implement SCA by 14 September 2021.

The FCA has reiterated that where possible, retailers and payment services providers should continue with necessary preparatory activities towards the implementation of SCA methods. Equally, the FCA has reiterated that any payment services providers (and as a result their merchants) who fail to comply with SCA methods by 14 September 2021 will be subject to full FCA supervisory and enforcement action.

Should you wish to discuss any aspect of this article, please contact our Payments team who will be delighted to assist. 

Contributor: Matt Atkinson (Solicitor) 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Date published

11 May 2020


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