Nok Nok Labs and digital payments provider Netcetera are teaming up to deliver customer authentication technology to merchants and payments providers to comply with PSD2 and 3D-Secure e-commerce protocols.
The Strong Customer Authentication mandates require merchants to use multi-factor authentication methods, many of which Nok Nok Labs, in its role as founder of the Faster Identity Online Alliance, has promoted in its efforts to eliminate static passwords.
The SCA requirements for e-commerce can trigger shopping cart abandonment when the process creates too much friction in the middle of a transaction. Through its Delegated Authorization, Nok Nok Labs and Netcetera are targeting merchants and providers seeking to comply who may not have the systems in place to handle SCA mandates or want third-party pre-authentication services.
The European Banking Authority's SCA deadline has been extended twice, most recently set for Sept. 14, 2021.
Nok Nok's S3 Authentication Suite provides passwordless authentication tools for merchants and acquirers to more easily authenticate users and bring more visibility into the process to assess risk.
Even though some governments relaxed SCA compliance deadlines, merchants are generally seeking ways to catch up with the e-commerce transaction increases brought on by COVID-19.
“Global banking regulations and COVID-19 contactless and mobile buying habits are speeding the demand for secure and easy-to-use authentication solutions,” Walter Beisheim, chief business development officer at Nok Nok Labs, said in a Wednesday press release. “Nok Nok and Netcetera can now offer banks and payment providers a customer experience that doesn’t interrupt the transaction while still meeting global regulations for risk.”
With the tightened security requirements that will come into effect with the implementation of PSD2-SCA, there is fear of more friction and less user-friendliness for the end customer, resulting in lost revenue.
“Combining solutions from Nok Nok and Netcetera to enable Delegated Authentication, makes it easier for payment processors and merchants to provide compliance, security and convenience at the same time.” Kurt Schmid, marketing and innovation director of secure digital payments at Netcetera, said in the release.
Delegated Authentication gives merchants strong customer authentication needed as a one-click authentication. It also provides the ability to perform transaction confirmation in accordance with PSD2; an often-overlooked requirement.
San Jose, Calif.-based Nok Nok and Zurich, Switzerland-based Netcetera say they will enable merchants to see fewer abandoned purchases and higher customer satisfaction.
