On 14 sept 2019 SCA became the new authentication standard across the EU due to PSD2 coming into effect. Although National Competent Authorities of all EU member states granted a transition period – with the exception of Sweden – PSPs that do not apply SCA will still be liable for any fraud – expect when an allowed exemption applies – as art. 74(2) of PSD2 applies regardless of any grace period.
As SCA may reduce conversion at checkout in a number of circumstances, issuers are stimulated in providing their customers with user-friendly ways to authenticate their transactions.
As mandated by PSD2 a cardholder is allowed to pay up to € 150 (or other currency equivalent) of contactless payments before being asked to either make a Chip & PIN payment or verify the contactless payment in-app. This resets the contactless counters and the user will be allowed to make € 150 worth of contactless payments with no CVM. However, as this authentication request happens at checkout if the cardholder does not respond quickly as expected the transaction will not go through.
So Revolut came up with a clever alternative. When the € 150 contactless payments limit is approaching the cardholder receives a notification on his phone (business customers get an email) and he may reset the limit in-app by entering the PIN or using fingerprint/face ID. This alternative way allows a longer time to respond to the request and does not affect a checkout experience.
Of course, the cardholder retains the traditional option to make a Chip & PIN payment when the actual contactless limit is reached.
We hope this will stimulate other issuers to come up with even more creative/clever ways to improve the authentication experience