Various reasons have led to people choosing cashless transactions over traditional payment methods. One of the motivations behind this is the rapid rise of eCommerce as it offers more convenient and direct buying and selling of products.
In truth, it is expected that the digital payment market would significantly in the next few years. This prediction makes sense as many businesses utilize digital payment methods regardless of the industry they belong to.
Unfortunately, the digital payment industry is vulnerable to security threats, especially without robust authentication security solutions. Bad actors seek to commit fraudulent activities as they are aware of how much the payment industry is raking in in terms of profitability. In truth, the global eCommerce has suffered significant financial losses due to online fraud.
The European Union or EU implemented the revised Payment Services Directive (PSD2) to combat this alarming issue. It is a regulation that aims to enhance security and improve consumer protection. Third-Party Payment Providers or TPPs in the European Economic Area (EEA) must integrate strong customer authentication into their services if they wish to remain compliant with this mandate.
Knowing the significant threat of cybercrimes, businesses must leverage security solutions to enhance cybersecurity and remain compliant with PSD2 policies. LoginID can help achieve this through its delegated authentication and payment authentication.
Delegated authentication refers to the process of assigning the task of verifying users to an outside party, like acquiring a bank or digital identity provider. It is an alternative that can offer convenience and security, helpful for not only consumers but also financial firms and eCommerce retailers.
On the other hand, payment authentication works similar to Multi-Factor Authentication or MFA asset that can detect fraudulent activities. It allows companies to know if the individual transacting is the legitimate account owner. Furthermore, Fintech industries integrate various payment authentication schemes to verify the validity of every transaction.
To learn more about how delegated authentication and payment authentication work with PSD2, you can read this article from LoginID.
