A version of this article appeared in the September edition of the Private Hire and Taxi Magazine (PHTM)
On September 14th, the way card payments are processed is changing. Is your fleet prepared?
The European Commission published the Second Payment Services Directive (PSD2) in December 2015. PSD2 has been live since January 2018, but on September 14th 2019, new requirements for authenticating card payments will be introduced in Europe. One of the major implications of PSD2 is the focus on improving security by emphasising Strong Customer Authentication (SCA).
If your taxi fleet accepts payment by credit or debit card via any method, including telephone, online or in-vehicle with a payment terminal, you need to be ready for the SCA deadline on September 14th. Even after Brexit, the UK’s regulator (the FCA) will almost certainly maintain these regulations.
An important element of SCA is two-factor authentication. Most consumers are aware of this, even if they don’t know it by that name. It’s when inputting a username and password isn’t considered secure enough, so additional steps are required (e.g. inputting a code sent to you by SMS). If you’ve used 3D Secure when shopping online, you’ve used two-factor authentication.
If you want to accept payments once SCA comes into effect, your payment processing tools will need to handle SCA. SCA requires authentication to use at least two of the following three elements:
- Something the customer knows (e.g. a password or PIN)
- Something the customer has (e.g. a phone or hardware token)
- Something the customer is (e.g. a fingerprint or face recognition)
Under these new regulations, banks will have to decline payments that require SCA and don’t meet these criteria. This will be costly for taxi fleets who ignore the new rules, since you won’t be able to accept payment by card. This is particularly likely to affect in-app payments where cardholders have previously “lodged” or “vaulted” a card, with problems likely for fleets using this technology to accept payments.
When implemented properly, SCA can have big benefits for your taxi fleet, including reducing chargebacks and fraudulent transactions, saving you money. But if you don’t implement SCA, or your payment system causes problems for customers trying to pay you, this could lose you money and customers.
CabCard can help you accept card payments in a secure and convenient way that complies with SCA, and save you money while helping your business grow. We can help you understand the new PSD2 requirements, and how you can set yourself up for success.