Strong Customer Authentication (SCA) and 3D Secure 2.0: Everything you need to know

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Executive Summary

  • On September 14, 2019, a new regulation called Strong Customer Authentication will be introduced in Europe for electronic payments.
  • SCA is essentially 2-Factor Authentication for card transactions.  
  • A card payment will be in scope of the regulation if the cardholder’s bank and the business’s payment provider are both located in the European Economic Area (EEA)
  • Several exemptions exist for SCA, including:
    • Transactions below 30 Euros
    • Low-Risk transactions as identified by the Payment Provider (Stripe, etc)
    • Monthly recurring subscriptions that are for the same amount each month
    • Whitelisted businesses that the customer identifies for their account
    • Secure Corporate Payments (corporate cards, corporate payments made via virtual cards as used in the travel sector)
  • A minority of card issuing banks may require SCA for all payments regardless of business location
  • The widely adopted method of complying with the SCA’s requirements is by using 3D Secure 2.0

Which Payment Processors will support 3D Secure 2.0 on Cloudbeds?

  • We are actively developing a 3D Secure 2.0 integration with our Stripe gateway connection that will be fully compliant with the upcoming SCA requirements.
  • In addition to Stripe, we plan to integrate with another payment gateway (Paysafe) that will support 3D Secure 2.0.  More information on this payment gateway will be available soon.
What steps should I take next?

If you are already using Stripe as your Cloudbeds Payment Gateway

Once 3D Secure for Stripe is completed, we will notify you of any potential changes to your payment workflows.  In the meantime, Cloudbeds recommends that all properties impacted by the SCA to sign up for and follow Stripe's updates and recommendations by reading and subscribing to Stripe's Guide to the SCA.

If you are NOT using Stripe as your Cloudbeds Payment Gateway

Cloudbeds highly recommends all customers impacted by the SCA to sign up with and migrate to Stripe in order to ensure a smooth transition once the SCA goes into effect.  Please see the Stripe Connection Guide for further details.

What if I'm impacted by the SCA and Stripe is not available in my country?

As of May 2019, there are a very few countries that are not serviced by Stripe due to regulatory reasons.  If your property is located in the following countries, please contact support@cloudbeds.com for next steps:

  • Bulgaria
  • Czech Republic
  • Hungary
  • Gibraltar
  • Cyprus
Theoretical Payment Flow Chart

The following theoretical payment flow chart is designed to help property owners understand how payments may function when the SCA goes into effect.  

ALERT: This payment flow is not set in stone and may change prior to the SCA going into effect.  Cloudbeds recommends that all properties impacted by the SCA to sign up for and follow Stripe's updates and recommendations by reading and subscribing to Stripe's Guide to the SCA.

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