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28 June 2019

City watchdog promises to make EU payment rules work for small firms

The Financial Conduct Authority (FCA) has announced that it is developing a ‘migration plan’ concerning new EU payment rules, known as Strong Customer Authentication (SCA), which are due to take effect later this year.

"In a statement issued this morning, the regulator stresses that it “will not take enforcement action against firms if they do not meet the relevant requirements for SCA from 14 September 2019 [the existing enforcement date]”.

SCA measures require shoppers to provide two types of authentication – for example a password alongside a code received by text – in order to make online purchases with a transaction value of more than 30 euros.

Responding to the announcement, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:

“It’s encouraging to see the FCA listening to our concerns about SCA and exercising some common sense. Of course it’s right that consumers have maximum protection against fraud, but enforcing change of this magnitude before everyone’s fully prepared for it will be bad for shoppers and small businesses alike.

“We’ll be working with the regulator to ensure necessary awareness levels have been reached before enforcement action starts and timeframes are sensible. Small firms will need at least 18 months to adjust to these new rules.

“We’re a few months from roll-out and most small business owners have never even heard of SCA, let alone understand how it will impact their firms.”