Strong Customer Authentication (SCA) is a security requirement under the European Union’s PSD2 regulation that mandates multi-factor authentication for most electronic payment transactions. SCA requires customers to provide at least two of three authentication elements:
- Something they know (password or PIN)
- Something they have (mobile device or token)
- Something they are (fingerprint or facial recognition)
This requirement significantly reduces fraud by making it much harder for unauthorized parties to complete transactions even if they obtain card details. Exemptions exist for low-risk transactions, recurring payments, and trusted beneficiaries, balancing security with user convenience for routine purchases.
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