Question ID
2021_6141
Legal act
Directive 2015/2366/EU (PSD2)
Topic
Strong customer authentication and common and secure communication (incl. access)
Article
97
Paragraph
1
Subparagraph
-
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication
Article/Paragraph
24
Type of submitter
Competent authority
Subject matter
Association of personalised security credentials to the payment service user
Question

Should strong customer authentication (SCA) elements always be issued under control of the Account service Payment Services Provider (ASPSP)?

Background on the question

When adding a payment card to a digital wallet, a payment service user is requesting the ASPSP for issuance of personalised security credentials to act as a possession element in future payment transactions.  

The process of adding the payment card to the wallet may have different options in the way the strong customer authentication for the association of the personalised security credentials according to Article 24 of Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication is executed.   

Some industry practices are observed where the wallet provider (in its role as token requester) provides certain SCA elements instead of the ASPSP. This could for example be a knowledge element for the payment service user which was issued and verified by the wallet provider.   

According to PSD2 Article 4(31), personalised security credentials are  personalised features provided by the payment service provider to a payment service user for the purposes of authentication. 

According to EBA Q&A 2019_4827, the "tokenisation of card details may meet the requirements of Article 7(1) of the Delegated Regulation, if the payment service provider of the payer (the issuer) is involved in the process of issuance of the token directly or indirectly (e.g. through an outsourcing agreement with a third party, i.e. a token requestor such as a wallet provider in the case of digital wallets or a merchant in the case of cards on file).” 

Submission date
Final publishing date
Final answer

Article 97(1)(c) of Directive 2015/2366/EU (PSD2) requires payment service providers (PSPs) to apply strong customer authentication (SCA) ‘where the payer carries out any action through a remote channel which may imply a risk of payment fraud or other abuses.

Article 4(31) of PSD2 defines ‘personalised security credentials’ as personalised features provided by the payment service provider to a payment service user for the purposes of authentication

 

Article 24 of the Commission Delegated Regulation (EU) 2018/389 prescribes further that ‘payment service providers shall ensure that only the payment service user (PSU) is associated, in a secure manner, with the personalised security credentials, the authentication devices and the software’ and that ‘the association by means of a remote channel of the payment service user's identity with the personalised security credentials and with authentication devices or software is performed using strong customer authentication’.

 

Accordingly, the payment service provider that has issued the payment card (issuer) is responsible for providing the SCA elements to the payment service user and is required to apply SCA when adding a payment card to a digital wallet.

 

Finally, issuers may outsource the provision and verification of the elements of SCA to a third party. In that case, the issuer should comply with the general requirements on outsourcing, including the requirements of the EBA Guidelines on Outsourcing arrangements (EBA/GL/2019/02) and the applicable requirements of the Delegated Regulation, including Articles 6-8 in relation to the respective SCA element, and Article 3 in relation to the periodical review of the security measures.

Status
Final Q&A

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.