KYC & SCA: How They Help You Keep Payments Safe and Boost Customer Trust

As an e-commerce merchant, customer trust is essential to do good business. It drives repeat sales, gets you more customers, and helps you build a solid reputation.
To win buyer trust, you need to secure them from threats and ensure they have a safe shopping and payment experience. Knowing your customers is key to keeping them safe. Establishing the identity of the customer behind every transaction helps you ensure you only approve genuine transactions. This is where Know-your-customer (KYC) and Strong Customer Authentication (SCA) play a major role.
Read on to know more.

How KYC helps keep your customers safe?

KYC helps you verify the identity of each customer before you onboard them or accept payments from them. This requires you to collect all info necessary to verify that the customer is genuine, such as passport or driving license or address proof docs. If you are a B2B business, then you must screen all prospects and partners before you get into any business relationships with them.
In short, it helps you prevent fraud, identity theft, money laundering and the like by ensuring all transactions are legit. It helps protect customer accounts from unauthorized access and helps you carry out adequate risk assessment.
KYC is particularly important if you do business in Europe. You must use KYC in order to comply with the Anti-Money Laundering Directive (AMLD) in Europe. This law aims to fight money laundering and terrorist financing, and is mandatory for all businesses in Europe. It requires you to monitor customer transactions and report any suspicious activity. You must also report payments that exceed the maximum transaction limits.

Know more: 4 Payment Regulations Every Business in Europe Should Know

How SCA keeps your customer safe?

Strong Customer Authentication or SCA protects customers from fraud by keeping online payments safer. It is mandatory for all businesses in Europe to use SCA, as per the revised Payment Services Directive (PSD2).
SCA is required for all customer-initiated online payments within Europe. It also applies for online card payments where the business and the cardholder’s bank are in the European Economic Area.
SCA uses two or more factors in the authentication process – a password or PIN, a smartphone, and a biometric scan (fingerprint/ iris/ voice). This helps ensure that the user is genuine and is the same person who they say they are. To apply SCA, you need to be running the latest versions of 3DS 2, which offers added layers of protection and liability guarantees.

How KYC and SCA helps you design a smooth CX?

KYC and SCA helps you establish the true identity of transacting parties and customers. This helps you process payments faster and with more security. When you already have your customers’ details, it also helps you design smoother and faster checkouts.
Since both processes help you know and understand your customer, you have a better idea of what they prefer. Thus, you can ensure hassle-free payments, leading to a better CX, repeat customers and enhanced brand loyalty.
Ensuring you have KYC and SCA processes helps you to stay compliant of local laws in Europe. Hence, all businesses must insist on it.

How can Novalnet Help?

Working with a payments partner like Novalnet can help you put KYC and SCA systems and processes in place and remain complaint with local laws.
We are a global PSP who are trusted advisors to Europe’s leading brands when it comes to payments. Our state-of-the-art technologies and methods help businesses in Europe accept payments globally. From our instant payment plug-ins to our AI-based risk management tools, we have the resources to get you up and running with your payments in a short time, and with zero hassle.
Reach out to us today to know more about how we can help your business.

Jose Augustine

Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.