UK Regulator Proposes Amendments to UK Technical Standards on Secure Customer Authentication

The U.K. Financial Conduct Authority has launched a consultation on proposed changes to the U.K. Regulatory Technical Standards on secure customer authentication and common and secure methods of communication and on proposed payments-related amendments to the Perimeter Guidance Manual and the FCA Payment Services and Electronic Money Approach Document. The proposals are relevant for payment service providers, e-money issuers, payment institutions, e-money institutions and registered account information service providers (AISPs). Responses to the consultation may be submitted until February 24, 2021, for issues relevant to contactless payments, and until April 30, 2021 for the remaining proposals.

The proposed amendments to the SCA RTS seek to address barriers to the adoption of open banking that the FCA has identified. The FCA is proposing to amend the SCA RTS to:

• add a new exemption from SCA for when customers access their account information through an AISP;
• mandate the use of dedicated interfaces (such as application programming interfaces (APIs)) by account servicing payment service providers (ASPSPs) to facilitate third party provider access to retail and SME customers' payment accounts;
• change the requirements for publishing interface technical specifications, availability of testing facilities, and fallback mechanisms by account providers;
• exempt ASPSPs with deemed authorization under the temporary permissions regime from the requirement to set up a fallback interface, where the ASPSP has an exemption from its home state competent authority; and
• increase the single and cumulative transaction thresholds for contactless payments from £45 to £100 and from £130 to £200 respectively.

The FCA is also proposing to amend the Approach Document to reflect changes to the expectations of firms in relation to SCA. Other proposed changes to guidance include amendments in relation to safeguarding and prudential risk management, the application of certain exemptions, such as the limited network exclusion and the electronic communications exclusions, amendments to the reporting requirements and changes to address the end of the Brexit transition period.

View the FCA's consultation paper (CP21/3).

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