While many financial institutions currently utilize hardware authentication devices for customer verification, some have transitioned to mobile-only authentication solutions. As the adoption of mobile authentication apps increases, the debate over whether banks should implement mobile or hardware authentication becomes more pertinent.
Under the forthcoming PSD3 and PSR regulations, banks are mandated to provide alternative methods for strong customer authentication (SCA), which are currently predominantly mobile-based.
In June 2023, the European Commission released draft proposals for the Directive on Payment Services and Electronic Money Services (PSD3) and the Payment Services Regulation (PSR), set to replace the revised Payment Services Directive (PSD2) and the revised E-Money Directive (EMD2). Article 88 of the PSR proposal mandates that financial institutions must not rely solely on a single SCA mechanism, such as smartphone-based authentication, but must support a variety of authentication methods. This stipulation necessitates that financial institutions adopt additional authentication mechanisms, including hardware authentication devices, alongside mobile-based SCA solutions.
Article 88 further requires financial institutions to ensure that all users, including individuals with disabilities, older adults, and those with limited digital skills, can perform SCA. This also encompasses users without access to digital channels or payment methods. Consequently, financial institutions must offer diverse SCA mechanisms to accommodate the unique needs and circumstances of all their users. For instance, individuals with visual impairments may prefer hardware authentication devices equipped with audio capabilities.
To understand the alternative SCA methods you currently offer or plan to implement to ensure compliance with PSD3 and PSR regulations, we created this questionnaire. This survey is conducted in collaboration with Monet+, a company specializing in digital identity and electronic payments, which can assist banks in implementing hardware keys as an alternative to mobile authentication.
If you would like to learn more about Hardware Keys, please fill out this online form, and Monet+ will get back to you promptly.
