The COVID-19 pandemic has set back travel brands that need to meet Strong Customer Authentication (SCA) requirements.
According to a new study from Amadeus, 66% of airlines, hotels and travel agencies are not ready to meet the deadline of December 31, 2020, when SCA requirements of the Payments Services Directive II come into play in Europe.
SCA mandates that the majority of online payments made in the European Economic Area be subject to two-factor authentication, such as entering a passcode sent to a phone alongside payment card details.
For travel brands, the change is significant, as bookings often involve multiple merchants in a single transaction, and each has a responsibility to ensure SCA checks happen.
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Amadeus finds that COVID-19-related delays have delayed SCA implementations by an average of six months. Because of the pandemic, a “significant majority” of respondents had expected the SCA deadline to be delayed further.
The biggest challenges to SCA readiness include COVID-19 (65%) and a lack of internal resources (55%).
Although travel brands are struggling to meet the new requirements, Amadeus points to recent progress with the new 3D Secure 2 authentication protocol now available, which gives the industry access to the function rich technology it needs to deliver SCA in a number of scenarios.
Recently, the world’s first 3D Secure 2 transactions were completed end-to-end across the Amadeus Travel Platform. The global distribution system is working to upgrade the Amadeus Travel Platform to be 3D Secure ready so it can pass more data about a payment between travel agencies, suppliers and the traveler’s card issuing bank.
“We’re proud of our role in enabling the first end-to-end 3D Secure 2 transactions for travel agency travel sales. It’s important now that suppliers and their agents also make the transition to the 3D Secure 2 protocol for their own systems. There is still much work to do across the industry and we stand ready to help,” says Jean-Christophe Lacour, head of merchant services, payments, at Amadeus.
In addition to migrating to 3D Secure 2, Amadeus recommends travel payment professionals also map specific payment flows, understand use cases, plan for merchant-initiated transactions and collaborate to benefit from exemptions.