The EU has set the stage with its SCA (Strong Consumer Authentication) regulations designed to make digital payments more secure. The goal of this implementation is to increase the level of security surrounding electronic payments that benefit both consumers and merchants, but is the end result meeting the objective?
Many countries, such as Hong Kong, Singapore, the US, Mexico, Brazil, Australia and Nigeria, are evaluating the regulations issued in Europe and considering it as a model to follow for their own digital payment industries. The SCA regulations have prompted countries to make changes within their digital banking systems and push for innovation regarding security and how data is treated through payment processes.
Open Banking, for example, is a regulatory standard implemented under PSD2 in which banks are required to develop an API mechanism that allows third-party access to customer data. This method is seen as a move to give more control to consumers and businesses over their transactional data. The Hong Kong Monetary Authority planned to launch an Open API framework last year, aimed to focus on areas such as: credit charge limits, payments, transfers, and new applications. The Monetary Authority of Singapore also planned on adapting to the benefits that will come with open banking. In the United States, the concern lies within the issuance of new antitrust laws within tech companies. Companies such as Microsoft have been in support of taking inspiration from the rest of the world and progressive towards data privacy measures that would give U.S. citizens more control over their own privacy regarding their data.
Although the payment industry has some challenges ahead, SCA has become a catalyst for reshaping thoughts on data protection.
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