fscom News and Events

Strong customer authentication: not as simple as just 2FA

[fa icon='calendar'] 22-Mar-2019 17:24:27 / by Alison Donnelly posted in Regulatory compliance, Payments sector, E-money sector, Open Banking and SCA

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In my previous blogs I have given you the basics of strong customer authentication (SCA) and explained how the exemptions could be used to minimise the disruption experienced by payment service users when making payments or accessing transaction information. In this blog, I will take a closer look at the details of the SCA obligations and explain why it’s not as simple as the much-mentioned two-factor authentication (2FA).

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Brexit: Temporary Permissions Regime for EEA firms

[fa icon='calendar'] 19-Mar-2019 20:15:43 / by James Borley posted in BREXIT, Regulatory compliance, Payments sector, E-money sector

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At the time of writing there are 10 days to go until the date (currently) written in UK and EU law on which the UK is scheduled to leave the European Union on March 29, 2019 – Brexit Day.

In anticipation of a ‘no deal’ Brexit, HM Treasury has enabled the FCA (and PRA) to create a Temporary Permissions Regime (TPR) whereby, at its simplest, EEA firms can effectively ‘grandfather’ their passports for a limited period beyond Brexit Day. 

This blog seeks both to remind EEA firms of the TPR, and the need and method to enter it, prior to Brexit Day (assuming that the current timetable remains), but also to highlight a couple of pitfalls for payments and e-money firms should they leave such notification to the very last moment.

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Strong customer authentication: the exemptions explained

[fa icon='calendar'] 17-Mar-2019 21:05:50 / by Alison Donnelly posted in PSD2, Regulatory compliance, Payments sector, E-money sector, Open Banking and SCA

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In my previous blog, I outlined the basic requirements of the new obligation, brought in under PSD2 (the second Payment Services Directive), for all payment service providers to apply strong customer authentication (SCA) in certain circumstances. SCA has to be applied both when accessing payment account information and when initiating a payment transaction meaning that a customer checking their account and then paying a couple of bills would have to go through SCA multiple times in one session, which is far from ideal on the user-experience scale. To avoid this, you, as a payment service provider (PSP) can apply one of nine exemptions, if circumstances permit.

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Strong customer authentication under PSD2: the basics

[fa icon='calendar'] 15-Mar-2019 10:57:00 / by Alison Donnelly posted in PSD2, Regulatory compliance, Payments sector, E-money sector, Open Banking and SCA

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Strong customer authentication (SCA) is a valid attempt by the EU to curb electronic payment fraud, including ‘card-not-present’ fraud. From a glance the concept is fairly simple, it will be a regulatory obligation to apply two factor authentication (2FA) to the electronic payment process. However, it’s not all quite as simple as that as SCA has more requirements than just the frequently touted 2FA. This blog will provide the basics on SCA and subsequent blogs will go into more detail on the exemptions and how SCA differs from simple 2FA.  

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Brexit: FCA's guidance for dealing with your EEA clients

[fa icon='calendar'] 27-Feb-2019 16:41:10 / by James Borley posted in BREXIT, Regulatory compliance, Payments sector, E-money sector

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Several weeks ago, our Managing Director Jamie Cooke wrote a blog which discussed the position of UK-authorised firms with regard to EEA-resident clients. He pointed out that in the case of a ‘No Deal’ Brexit, a passporting UK firm will no longer be able to actively solicit EEA-based clients and discussed the lack of clarity regarding business initiated exclusively at the discretion of EEA-based clients.

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No-deal Brexit – is there a regulatory backstop?

[fa icon='calendar'] 06-Feb-2019 16:35:00 / by Jamie Cooke posted in BREXIT, Regulatory compliance

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Following another week of inconclusive Brexit debate at Westminster, the prospect of a disorderly, no-deal withdrawal seems, either by accident or design, to be looming larger on the horizon.

It occurs to me that whilst many UK authorised firms have made responsible plans for the migration of their European business, many such plans have reasonably assumed that either withdrawal would be governed by an EU / UK trade deal or that that the agreed transition period to 2020 would apply. Or perhaps both.

I expect that the immediacy of the 29 March is now concentrating the minds of boards in all firms whose applications to European regulators have yet to be approved. In particular, I suspect they will be urgently developing contingency plans for a no-deal Brexit, should one occur. (Download fscom's Brexit Planning E-book here)

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Be "reassured" of the benefits of external review

[fa icon='calendar'] 07-Dec-2018 11:49:00 / by James Borley posted in AML Audit, fincrime, Regulatory compliance

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Assurance, or the use of auditors to search for problems at firms, can be very useful to the regulated community in all manner of ways, especially during the authorisation process or in respect of the EU's Payment Services Directive. 

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Stockholm as Post Brexit Destination - a swede choice?

[fa icon='calendar'] 13-Nov-2018 12:40:00 / by James Borley posted in BREXIT, authorisation, Regulatory compliance, Payments sector, E-money sector

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As we embark upon yet another week of uncertainty regarding what Brexit deal, if any, the Prime Minister might secure, the latest in my Q&As with EU regulators sees me heading to Sweden. 

I fondly recall, back in my FSA days, visiting Finansinpektionen (the Swedish FSA) to find out more about the payments market in Sweden and how they approached licensing and supervision, given they were one of the few EU Member States that took advantage of article 26(1) of PSD1 to allow for ‘Small Payment Institutions’ (SPIs). Colleagues at Finansinspektionen were friendly, approachable and keen to exchange knowledge and experience, so I was hopeful that they would continue to be so despite my own departure from the regulator. I am thankful, therefore, to Roger Jacobsson for sparing the time to answer our standard questions regarding UK payment/e-money institutions looking to establish a second business in Europe to benefit from passporting rights.

(Download our Brexit Planning E-book here for an overview of different EU jurisdictions)

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New Rules for Payment and E Money Institutions

[fa icon='calendar'] 29-Oct-2018 15:00:00 / by Alison Donnelly posted in PSD2, Regulatory compliance, Payments sector, E-money sector

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New rules for payment and e-money institutions 

Over the past couple of months, the FCA has been consulting on whether to apply the Principles for Businesses, and some other Handbook rules, to payment and e-money institutions and registered account information service providers. This marks another step in the FCA’s journey towards greater supervision of the non-bank payment services sector.  

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Brexit: Doubling up in Dublin?

[fa icon='calendar'] 26-Oct-2018 17:09:38 / by James Borley posted in BREXIT, authorisation, Regulatory compliance, Payments sector, E-money sector

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So, after weeks of conversations with various regulators across Europe, I am delighted to be able to share the views of the Central Bank of Ireland towards UK payment and e-money institutions looking to set up a new office in Ireland as part of their Brexit strategy. Since firms started thinking about their Brexit strategies, Ireland has often been mentioned by clients of fscom as their first consideration, principally based on common language and proximity. Indeed, being based in Belfast, we find our own proximity to Dublin to be particularly helpful in helping firms with the Central Bank.  As we have seen though, there are many other factors that need to be taken into account. As ever though, I do not pass comment on the Central Bank’s views in this article, preferring to simply pass them on to help you make up your own mind. So, thanks again to the Central Bank for granting me access and, in particular, to Russell Burke from the Payments Authorisation Team.

(Download our Brexit Planning E-book here for an overview of different EU jurisdictions)

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