Following multiple delays to the its original timeline, the European Commission is now expected to formally adopt and publish its final Regulatory Technical Standards on Strong Customer Authentication and common and secure communications (RTS on SCA) on 27 November. Since receiving the final draft RTS from the European Banking Authority in March 2017, the Commission’s Directorate General for Financial Services has made changes to the original draft.
As part of the revised Payment Services Directive (PSD2) which is to enter into force on 13 January 2018, the European Commission and European Banking Authorities had been mandated with the drafting of the controversial RTS.
According to a statement given by Ralf Jacob, Head of Unit at the European Commission, to the European Parliament’s ECON Committee on 21 November, changes to the draft RTS have only been made in relation to the dedicated interface aspect of the legislation. In that respect, the Commission’s final proposal provides for a mandatory fall back mechanisms for bank account accessing third-party applications, while allowing for possible exemptions for banks which already have good and secure dedicated interfaces.
Although the final text has not yet been made available, Ecommerce Europe is disappointed by the Commission’s announcements that no changes have been made to the provisions on Strong Customer Authentication. Ecommerce Europe continues to be very concerned that the current provisions on when SCA is required from customers will have a significant and damaging impact on European online merchants and the wider Digital Single Market. While there currently are specific exemptions proposed by the EBA and the Commission based on trusted beneficiaries, recurring transactions, low-value transactions and transaction risk analysis, strong reservations about their applicability and impact on established online merchant business models remain. Ecommerce Europe has thus been strongly lobbying for significant changes to the RTS to bring them into line with market realities and take into account online merchants’ concerns.
Ecommerce Europe is looking forward to receiving the European Commission’s final RTS. Once adopted and presented, the European Parliament and Council of the EU will have up to 3 months to scrutinize and adopt or reject the proposed RTS. Given the final text, European online merchants will adopt their position in the coming weeks.