The Financial Conduct Authority (FCA) has reportedly delayed the enforcement of strong customer authentication (SCA) by a further 18 months.
The SCA delay comes after a number of warnings that the new EU online regulations, which are designed to reduce fraud, could cause online sales to suffer.
As reported by the Financial Times, SCA was set to be carried out in September 2019. However, this date came under fire from critics who claimed companies did not have enough time to prepare.
It is thought that this lack of preparation from companies to implement multi-factor authentication could make more than a quarter of online payments impossible to complete.
On the issue, the FCA consulted trade group UK Finance, who completed a report last week outlining that companies should now have until March 2021 to implement technical requirements and another six months to secure more advanced forms of authentication.
According to the report, the FCA is expected to formally endorse the recommendations made by UK Finance next week, following a meeting with key industry stakeholders.
UK Finance also said that due to the nature of cross border payments, the issue requires an EU-wide solution.
Following this, the Central Bank of Ireland has also decided to push the deadline and is giving businesses more time to implement SCA.
The requirements of SCA mean multi-factor authentication is necessary for online payments, a big reason for the delay.
This has sparked worry from retailers and merchants that customers will abandon their online shopping because more factors means more time is spent.
However, the new regulations are broad in the fact they allow businesses to be flexible and create authentication that suits their clientele.
According to industry experts, not only is SCA essential when tackling fraud online but it will also allow existing retailers to strengthen their relationship with its customers by ensuring a secure electronic payments service.
The decision made by the FCA has been welcomed by a number of EU countries including France, Italy and Denmark.
Previously, the European Banking Authority said “limited additional time” could be offered to merchants.
UK Finance and the FCA did not comment on this.