With news out this past week that the U.K.’s Financial Conduct Authority (FCA) has issued its second delay of PSD2’s implementation in six months — this time until March 2022 — fresh calls are being made for interoperability and standards to ensure that the swift and functional marriage of payments, authentication and convenience can go forward.
The postponement is a nod to the complexities facing merchants and banks as they add new levels of verification for eCommerce and other online transactions. Strong customer authentication (SCA) has already become official in the European Union. The integration of new levels of authentication, merchants and other stakeholders can be costly and time-consuming.
The FIDO Alliance seeks to help foster interoperability among strong authentication technologies, streamlining those integrations. (FIDO stands for Fast Identity Online.)
Payments heavyweight Visa, through a newly-announced investment in LoginID, is investing in the marriage between payments and authentication — done seamlessly and without the password.
LoginID, a FIDO-certified authentication provider, said Tuesday (June 1) that it has garnered an additional investment from Visa for an undisclosed amount, which comes on top of the firm’s seed funding round via FinTech investors that was announced in March.
The Visa announcement comes as advanced technologies are increasingly being used to verify users. PYMNTS has estimated that as many as 18 billion transactions will be verified using biometrics this year.
In an interview with Karen Webster, LoginID CEO Simon Law said the new funding signals that “Visa is on board with supporting the next generation of authentication on the internet.”
Visa, with its network of more than 15,700 issuers, is championing biometric authentication as a safe and secure way to transact, Law maintained.
FIDO’s standards are supported by Visa and payment network peers such as Mastercard and American Express, along with tech firms like Microsoft and Google. Law said Visa in particular is starting out with delegated authentication — the PSD2 regulation that allows authority to be “delegated” from an issuer to a payment service provider or merchant (combining FIDO with the 3DS network) — in Europe, and it will likely aim to roll out similar models across the world.
As Law explained, delegated authentication accelerates the execution, implementation and compliance to standard (with FIDO-based credentials) without degrading the experience for the consumer or the merchant.
Consumers want their commerce experiences to be the same everywhere they go on the internet. Law said the optimal digital experience is one that brings together identity, payments, security and convenience.
The interoperability among authentication technologies benefits merchants (through higher conversion and lower fraud rates), issuers (through increased business) and consumers, who value a one-click checkout experience.
“It’s a win-win for everyone,” said Law, who also noted that stakeholders can easily integrate to FIDO-certified authentication through application programming interfaces (APIs) and software development kits (SDKs). That “light integration” approach will help Visa promote the FIDO standards globally. He told Webster that 3DS vendors have been adopting LoginID’s solution.
The Visa investment, he said, “accelerates the adoption of 3DS 2.0 because the concept of frictionless authentication from the issuers will come to fruition with the marriage of FIDO and 3DS.”
With a nod to the FCA’s delay in the U.K., said Law, “the reason there’s been a delay is that the technology needed to catch up. And the solution is here. This is an opportunity to create a better, more secure experience.”