What does SCA stand for in the payment processing context?

In the context of payment processing, SCA stands for Strong Customer Authentication. This term is particularly relevant within the European Union, where it is a regulatory requirement under the Payment Services Directive 2 (PSD2). Strong Customer Authentication refers to the requirement for multi-factor authentication to enhance the security of electronic payments. It aims to reduce fraud and enhance the security of transactions by requiring at least two out of three possible elements: something the customer knows (like a password), something the customer has (like a smartphone), and something the customer is (like a fingerprint).

Implementing Strong Customer Authentication plays a crucial role in building trust in the digital payment ecosystem, ensuring that legitimate customers can transact safely while mitigating risks of identity theft and fraud. By requiring multiple forms of verification, SCA helps to protect both consumers and merchants in the ever-evolving landscape of online payment processing.