Online trading is slowly dominating the retail industry, owing to numerous technological advancements and the need for contactless transactions amid the COVID-19 pandemic. At least 20% of retail sales happen on digital platforms. This is projected to grow further in succeeding years as more consumers use the internet to purchase different products or services.
The rise of e-commerce has resulted in a growing number of digital wallets and financial technology solutions, making payments more accessible to many individuals. Almost 80% of adults worldwide have an account with banks or mobile wallets. This trend makes it crucial for businesses to adopt tools that allow them to accept digital payments.
But the growth of online transactions attracted bad actors, leading to the continuous upsurge of cybercrimes. This results in billions of annual losses and businesses losing customer trust.
Investing in a robust identity authentication solution helps protect customer accounts against fraudsters. Companies should also abide by the online security standards set by different organizations, such as the PSD2 of the European Union. This can help enterprises set up cybersecurity measures that can mitigate the chances of them falling prey to relentless attacks.
PSD2 and its Requirements
Fully implemented by the EU on December 31, 2020, the revised Payment Services Directive regulation aims to revolutionize digital payments in the region. This allows account information services providers (AISPs) access to customer information, especially if they were permitted to do so. The statute also centralizes the payment market among EU members, promoting competition and innovation in the industry.
One of the main provisions of the PSD2 is the need to adopt a multi-factor authentication solution to help fend off fraudsters from stealing accounts. PSD2’s Strong Customer Authentication (SCA) guidelines allow companies to let verified customers make secure online transactions. This is done by combining three user verification elements: knowledge, possession, and inherence.
Knowledge refers to text-based credentials, including passwords and security questions. Possession is signing in using a specific device or hardware tokens. Meanwhile, inherence refers to a customer’s biological data, like fingerprints and face scans. The consumers must do at least two of these three to authenticate themselves and access their accounts.
Conclusion
As bad actors continue their relentless attacks, adopting robust cybersecurity tools is crucial to protect corporate and consumer interests. Investing in solutions like biometrics will allow companies to comply with global standards in user verification and enable them to keep bad actors at bay.
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