Strong Customer Authentication - Frictionless Payments - Smart Payment Association

Strong Customer Authentication - Frictionless Payments - Smart Payment Association

13.12.2016: In recent months, we’ve seen the payment industry’s innovation agenda take a significant step forward. After much work, the standardization

In recent months, we’ve seen the payment industry’s innovation agenda take a significant step forward. After much work, the standardization initiatives, and regulatory and authentication frameworks, are at last coming together.

Spurred on by this, we are likely to see new players entering the payment value chain - not to mention the evolution of existing business models. It all heralds a dramatic change in the current financial services ecosystem.

With the foundations now in place, it’s time for the real work to begin – particularly if the tight implementation dates set by the regulatory bodies are to be met.

So, as banks embark on planning, designing and deploying innovative new online and mobile payment services, and developing new banking interfaces and authentication techniques, it is useful to take a step back – to see how we got here, what more needs to be done, and how the SPA can bring its considerable expertise to bear to help.  

A key cornerstone for the move to ‘frictionless’ online payment is now in place. In October, EMVCo finally published its 3DS 2.0 Protocol and Core Functions Specification for app-based authentication and integration with digital wallets, as well as traditional browser-based e-commerce transactions.

The principles rely on risk-based authentication, and the use of Strong Customer Authentication (SCA) only when required. However, this latter functionality must always be used to conform with the EBA Regulatory Technical Standard on SCA.

See SPA's position on the Regulatory Technical Standard on Strong Customer Authentication

The landmark EMVCo specification provides a globally interoperable framework that will promote a consistent authentication user experience across all e- and m-commerce channels and connected devices.

 Reflecting current and future market requirements, the specification delivers the flexibility the payment industry needs to support new online authentication technology developments. But it must do so within the boundaries of the recent requirements set by the EBA.

For our part, SPA members will be on hand to provide advice, guidance and technical expertise every step of the way. SPA Members have been strongly involved in developing ISO standards to support the interoperability of new open payment infrastructures which are regulated under the European Parliament’s revised payments directive (PSD2).

The challenging 2018 implementation deadline of new functional and security requirements is pushing banks to actively explore how to develop standard APIs. These APIs will enable Third Party Payment Providers (TPPs) to access information on bank-held payment accounts, a major breakthrough.

Over the past few months the SPA has undertaken a detailed evaluation of a number of new European schemes within the SEPA framework, including Instant Credit Transfer Payments and Mobile P2P payments.

As the payment market continues to evolve, SPA is committed to keeping its finger on the pulse of emerging innovations to ensure such payment mechanisms represent an appropriate yet complementary option to today’s proven secure card payment technologies and infrastructures.

Meanwhile, as a review of recent market data confirms, contactless card transactions continue to grow dramatically around the world. [See SPA's Paper: Contactless Payment Benefits & Worldwide Deployments - Food for thought for US issuers - April 2016]. Despite this impressive growth, fraud levels on contactless cards and devices remains impressively low.

Indeed, consumer use of payment cards continues unabated. European Central Bank statistics point to double-digit growth in card transactions compared to other payment instruments such as credit transfers, checks, direct debits and cash.

This unstoppable move towards card adoption has been fuelled by the recent US migration to chip card technology, and completion of the long envisioned global EMV infrastructure.

The increasing acceptance of contactless cards and readers is paving the way for the adoption of mobile payments.

Representing a vital first step in consumer and merchant education, familiarity with contactless payment is proving highly effective at preparing the way for user acceptance and take-up of “The Pay” options: Apple Pay, Samsung Pay and Android Pay.

SPA is teaming up with the financial industry to better understand the regulatory requirements in terms of customer authentication, and to anticipate the development of fit-for-purpose contactless payment products.

For example, in August the European Banking Authority (EBA) published its consultation paper on draft technical standards for strong customer authentication and common and secure communication for remote electronic payment transactions under the PSD2.

SPA has also been working with the European Card Stakeholders Group (ECSG)* to review the PSD2 compliance implications for banks and provided the EBA with a set of constructive comments to facilitate strong customer authentication implementation.

With the ‘new’ ECSG now an independent organisation, SPA is channelling its input through a very active participation in the Vendor sector of the organization.

The first priority for the ECSG has been to focus on the publication of the next release of the Volume Book of Requirements, which will take into account the new regulatory provisions for visual and electronic identification of co-branded payment cards.

Through its ECSG Board membership, SPA has also been heavily involved in management tasks; the creation of governance rules and frameworks for the new entity to ensure maximum levels of collaboration while protecting the intellectual property of vendors.

SPA intends to continue to play its leadership role of the Vendors Sector of the ECSG and to actively push for innovation, while supporting appropriate standards that add value for banks and their customers.

As we move into 2017, regulations will continue to evolve as new ways to pay are developed and adopted. SPA is committed to ensuring that such regulations do not negatively impact on banks or over complicate the user experience.

Looking ahead at the major challenges facing our industry in 2017, one cannot ignore the complexities of this fast evolving environment.

The crucial issues surrounding the roll-out of instant credit payment transfers, initiated with different personal devices, and the implementation of the interfaces required for the provision of Third Party Payment Providers according to the PSD2, must be effectively addressed.

 SPA will remain active in the standardization process of APIs, protocols and security architectures to protect all the actors involved in these new payment circuits.

Throughout 2016, much of the discussion centered on the financial industry real use cases for Blockchain and Distributed Ledger Technology (DLT). 

The challenge now, SPA believes, is to reach a broad consensus between banks and fintechs to solve existing operational problems. We must come together as an industry to build and implement the financial Blockchain solutions of the next decade.

 It’s a major task, and SPA will continue to monitor and contribute to those standardization initiatives intended to improve financial Blockchain interoperability and security.

In all, 2016 was a very successful year. Agreement of the various payment regulations and standards was long in coming. Now we are here, it’s time the real work started.

The Smart Payment Association (SPA) addresses the challenges of the evolving payment ecosystem, offering leadership and expert guidance to help its members and their financial institution customers realise the opportunities of smart, secure and personalised payment systems and services both now and for the future. For more information on the SPA, visit our website:

Stéphanie de Labriolle-


13.12.2016 / MaP

More News

Third Executive Board Member for Porsche Consulting
Federico Magno to head the automotive sectorThe management consultancy Porsche Consulting GmbH has expanded its board of executive directors. As of January 1, 2017, Federico Magno (44) will become the third member, with overall respo more >>
SKODA setzt Strategie des gesunden Wachstums in Deutschland erfolgreich fort
› 200.000 Pkw-Neuzulassungen pro Jahr und einen Fahrzeugbestand von zwei Millionen Autos im Visier› ŠKODA Neuzulassungen steigen bis zum Jahresende voraussichtlich auf 185.000 Fahrzeuge› 2017 verstärkt ŠKODA seine 2011 eingeleitete Produktoffensive› Am 4. März erlebt der neue &Scaro more >>
BMW Group sales achieve record November
Worldwide 209,743 vehicles delivered, up 6.2%Year-to-date sales increase 5.8%: 2,152,393 vehicles soldBMW year-to-date deliveries up 5.6% to 1,824,490MINI sales climb 7.4% in first eleven months: 324,417 delivered55,000 electrified BMWs sold in year-to-date  more >>
Audi sales up in all core regions
Around 154,050 deliveries worldwide in the month – an increase of 4.3 percent      Sales chief Dietmar Voggenreiter: “Europe strongest growth engine, up nine percent in November”      Europe launch for Audi Q2 and A5 more >>
Dr Clemens Börsig standing for re-election to Daimler Supervisory Board
The Supervisory Board of Daimler AG has nominated Dr Clemens Börsig for re-election as a shareholder representative on the Supervisory Board. His election for a further term of office spanning five years is to be proposed at the Annual General Meeting in Berlin on March 29 more >>
Olaf Schick appointed new Chief Compliance Officer at Daimler
    New Head of Group Compliance at Daimler    Dr. Wolfgang Herb, currently Head of Group Compliance, to retire more >>
Mercedes-Benz surpasses total unit sales of the previous year
... already in NovemberMercedes-Benz increased its unit sales in November by 12.7% to 182,602 vehicles, thus achieving its 45th consecutive record month. Sales were especially strong of the new E-Class Saloon and Es more >>
Change of Management at BBAC, Daimler's Largest Joint Venture in China
    Arno van der Merwe new President and CEO of Beijing Benz Automotive Co. (BBAC) from April 2017    Peter Schabert retires after 31 years at Daimler AG    Huber more >>
Jaap van Wessum neuer Coopertires Director Sales Europe
Seit dem 1. Dezember 2016 hat Coopertires in Europa einen neuen Director Sales. Die Cooper Tire & Rubber Company Europe Ltd. ernannte Jaap van Wessum für diese Aufgabe. Er berichtet an Luis Ceneviz, den Mana more >>
Volkswagen Truck & Bus invests in Brazil
    EUR 420 million for new products and production modernization    Renschler expects market to recoverAndreas Renschler, CEO of Volkswagen Truck & Bus (left), und Roberto Cortes, CEO of Volkswagen Caminh& more >>
Daimler Financial Services finalizes acquisition of Athlon Car Lease International
 photo caption:   Gero Goetzenberger, new CEO of Athlon Car Lease International.    Approved by regulatory authorities, acquisition takes place December 1, 2016  &nb more >>
BMW Group U.S. Reports November 2016 Sales
    BMW brand sales decrease 18.2 percent    MINI brand sales increase 1.4 percent Sales of BMW brand vehicles decreased 18.2 percent in November for a total of 26,189 compared to 32,003 v more >>
American Honda Sets New Sales Records in November
    Powered by both cars and trucks, American Honda and the Honda Division set new November sales records    American Honda and Honda Division trucks also set new November sales marks  more >>
BMW Own venture capital fund with up to € 500 million over ten years
    Widened scope of investment    Greater independence    Presence in start-up hub Silicon Valley The BMW Group is expanding the successful concept behind its vent more >>
Volkswagen Group and SOVAC to produce vehicles in Algeria
   - Local assembly in Relizane from spring of 2017   - Daily production capacity of more than 100 vehicles of the Volkswagen, Volkswagen Commercial Vehicles, SEAT and ŠKODA brandsToday, the Volkswagen more >>
Porsche appoints renowned experts to its sustainability advisory committee
Sportscar manufacturer increases dialogue with stakeholders photo caption:  The new sustainability advisory committee (from the left): Prof. Dr. Maximilian Gege, Prof. Dr. Ortwin Renn, Dr. Sonja Peterson, Prof. Dr. Lucia A. Reisch, Prof. Dr. Dr. more >>
Take the McLaren for the price of a return on the Gatwick Express*
    Headline offers include the McLaren 540C Coupé for less than £32 a day with a PCP plan and deposit    Segment-leading residual values of 63% after three years and 30,000 miles forecasted for the more >>
BMW Belux management news
Jean-Philippe Parain, actuellement President & Belux CEO de BMW Group , succède à Nicolas Peter en tant que Senior Vice-President Sales Region Europe. Dr. Peter Henrich devient President & CEO d more >>
Volkswagen Group and Strategy 2025
Investment planning sets the course for digital transformation and "Strategy 2025"    Focus on environmentally friendly technologies and vehicles as well as digitalization and connectivity    C more >>
Volkswagen concludes pact for greater economic viability and a more secure future
    Positive impact on annual earnings of €3.7 billion from 2020    Compulsory redundancies excluded; socially compatible reduction in workforce    Investments of €3.5 billion in future-oriented areas more >>
Mercedes Benz production milestone in China
- Beijing plant manufactures one millionth car with the three-pointed star    Mercedes-Benz passenger cars made locally in China since 2005    Local production of four models: Mercedes-Benz C- and E-Class, G more >>
Audi starts fourth quarter with sales growth
Around 150,950 deliveries worldwide in October, up 1.2 percent      Sales chief Dietmar Voggenreiter: “We are on track to closing the challenging year 2016 with growth”     &n more >>
Konzernergebnis nach Steuern der Porsche SE steigt in den ersten neun Monaten
....auf 1,64 Milliarden Euro-  Nettoliquidität beträgt 1,31 Milliarden Euro -  Prognosen für das Geschäftsjahr 2016 unverändertDie Porsche Automobil Holding SE, Stuttgart („Porsche SE“), hat im Zeitraum vom 1. Januar bis zum 30. September 2016 ein Konzernergebn more >>
SKODA wächst im Oktober um 10,6 Prozent
› Weltweiter Absatz steigt im Oktober um 10,6 Prozent auf 97.900 Fahrzeuge› Von Januar bis Oktober 6,7 Prozent mehr Automobile an Kunden ausgeliefert› Kräftiges Wachstum in China (+21,3 Prozent) und Europa (+4,9 Prozent) › Modelle ŠKODA RAPID und ŠKODA SUPERB legen weltweit zweistellig zu more >>
Opel auf Wachstumskurs – bereits jetzt 1 Million Verkäufe erreicht
•    Millionen-Marke deutlich früher als im Vorjahr geknacktOpel ist in Europa weiter auf Wachstumskurs: In den ersten zehn Monaten des Jahres legten die europaweiten N more >>
Renault’s international growth continues with the expansion of its SUV range in South America
•    The Koleos and the Captur arrive in South America•    Brazilians get a chance to discover the Kwid show car•    Renault’s new 1.0 SCe and 1.6 SCe engines more >>
Toyota mit weltweitem Absatzplus auf 4,36 Millionen Fahrzeuge
Finanzergebnisse der ersten Hälfte des Geschäftsjahres 2016/17    Nettogewinn von 8,02 Milliarden Euro* von April bis September 2016    Umsatz von 110,76 Milliarden Euro und Betriebsergebnis von 9,46 Milliarden Euro    Jahresabsatz von 8,85 Millionen Fahrzeugen erwartet more >>
Nissan contributes € 528 million for third quarter 2016 to Renault’s earnings
Nissan released today its results for the second quarter of fiscal year 2016/2017 (April 1, 2016 to March 31, 2017).Nissan’s results, published in JGAAP, for the second quarter of fiscal year 2016/2017 (July 1 to September 30, 2016), after restatements, will have a positive contribution to Renault’s second-half 2016 net income estimated at &e more >>
Mercedes-Benz: Successful October due to strong unit sales in China
Mercedes-Benz increased its unit sales by a double-digit growing rate in October, delivering a new high of 173,096 vehicles (+11.5%). In Europe and Asia-Pacific, the Stuttgart-based company with the three-pointed star achieved the highest more >>
ALPINA expands sales to China
• ALPINA launches first model in China• Prestige Cars Group will be the official importer• Sales will start in Beijing, Shanghai and Shenzhen in NovemberPhoto: (from left to right) • Yunzh more >>
Volvo Cars expands production in China and unveils new China strategy
Volvo Cars has unveiled a new manufacturing strategy for China in which production capacity will be increased and China will be developed into a global manufacturing and export hub, servicing growing demand for its new range of cars in the more >>
Ford Options Gives Consumers More Vehicle Financing Choices
•    Ford Credit introduces Ford Options to tailor-make your new car financing deal•    Customers can choose deposit amount, loan length and annual mileage•    At agreement/loan end, customers may trade in, purchase or return the vehicleFord Credit, the financ more >>
Honda Announces $53 Million Investment in Central Ohio Facilities
.... to Strengthen North American OperationsCompany to open data and market quality centers in Raymond, OhioHonda today announced new investment of $53 million for the con more >>
Honda Aircraft Company expands HondaJet sales to Middle Americas
SYI Aviation appointed as HondaJet dealerHonda Aircraft Company today announced that it has expanded sales of the HondaJet to Middle Americas with the appointment of SYI Aviation, based in Panama City, Panama as the newest Honda more >>
Volkswagen Group reports solid earnings in period to September
    Sales revenue of €159.9 billion on a level with the previous year    Operating profit before special items improves by €1.1 billion to €11.3 billion in the first nine months    Net liquidity in the Automotive Division at a robust €31.1 billion    Spec more >>
Personnel changes at the BMW Group
BMW Group plants Dingolfing, Regensburg and Spartanburg and Corporate Quality under new managementEffective 1 February 2017, Dr. Andreas Wendt will take over as director of BMW Group Plant Dingolfing. The 58-year-old Wendt has been with the company for 14 years and currently manages the Regensburg plant. more >>
Onroak Automotive acquires Crawford Motorsport Division
....located in Denver, North Carolina for its North American operations.     Onroak Automotive has committed to North American operations in Denver, North Carolin more >>
Audi Group: Special items weigh on third quarter
Risk provisioning items for V6 3.0 TDI diesel issue increased by € 620 million      Operating return on sales 6.9 percent after three quarters, or 8.9 percent before special items     more >>
Porsche once again significantly increases its operating result
The number of employees continues to increase – team has doubled in size in just six yearsA positive result in terms of operating result and yield: After the first nine months of 2 more >>
2001-2023 copyright