PSD2 - Strong Customer Authentication (SCA)

Risk of unexpected declines of contactless bank cards after 14th September, 2019

September 14, 2019 was the deadline for the implementation of Strong Customer Authentication (SCA) for debit and credit card transactions. While the implementation of certain aspects of SCA has been deferred until the end of 2020 under current regulations, cardholders at the point of sale (POS) must enter their PIN either after every five contactless transactions or if the total value of contactless transactions exceeds 150 euros

The payment terminal should prompt the cardholder to enter their PIN if necessary, but it is possible that some contactless bank cards may generate a "transaction rejected, use another reader or card" message instead. We do not know how often this will happen, as it depends on whether a particular card issuer has updated its cards to comply with the new rules. Our advice to you is not to worry because there is a solution for this situation and the cardholder can still easily pay with his card: When the terminal displays the message "Transaction rejected, use different reader or card", simply ask the cardholder to insert the same contactless bank card into the payment terminal and perform a standard chip & PIN transaction. This should allow the transaction to continue, provided the customer has sufficient funds in his account.

Apple Pay and Google Pay transactions are not affected and will function normally. However, it may happen that when paying with Wearable (e.g. Fitbit) the payment is rejected and the customer has to pay with his physical card. 

As mentioned above, we do not know how many of your transactions will be affected, as it depends on how quickly the cards are exchanged by the customer's banks. We recommend that you inform your employees about the described possible effects of SCA on contactless payments

You can find a quick and helpful overview of how to operate your terminal here:

"First aid" for merchants

Questions & Answers

Cardholders should be asked to enter their PIN after every five contactless transactions or if they have made contactless transactions worth a total of 150 euros since the last time they entered their PIN.

No. We expect issuers to rollout new cards (with the counting feature) as existing cards expire. This may take some months or years to replace every card in the market.

The payment terminal should prompt the cardholder to input their PIN. However, in the early stages there is a risk that the transaction is simply rejected instead with a “transaction rejected, use another reader or card” message. Simply ask the cardholder to insert the same contactless bank card into the payment terminal and perform a standard chip & PIN transaction.

Just ask the cardholder to insert their card in the payment terminal and do a standard chip & PIN transaction. This will work provided the customer has funds in their account.

We don’t know. It depends on the speed at which issuers update their cards.

Yes, these transactions are already authenticated by the user’s biometric data so don’t count towards the new contactless limits.

There may be an issue with some wearable payment devices (eg Fitbits). If one of these devices generates a “transaction rejected, use another reader or card” message, the shopper cannot make a Chip and Pin transaction and will need to use a physical card instead.

All parties are moving as quickly as they can towards a complete solution and we will communicate any relevant changes as soon as they are ready for implementation.