Help, why has my contactless payment just been declined?

It may have been because Strong Customer Authentication (SCA) has arrived as part of the second Payment Services Directive (PSD2).

So what?

You may ask!

If you make contactless payments then this will affect all of us – yes, even you.

First things first

This blog post is not: an in-depth analysis of the minutiae of SCA and PSD2 – there are many others who can provide a much better explanation and analysis of these two things.

This blog post is (or at least tries to be): a simple explanation of some payment disruption that we all will probably experience in shops in the coming days when you try and make a contactless payment.

For clarity, let me repeat that last point.

This blog only looks at contactless payments not all the other online payments you make.

What is changing?

On the 14th September new requirements have been introduced in Europe (forget Brexit – this includes the UK) for authenticating on-line payments.

It’s called Strong Customer Authentication (SCA) and is part of the second Payment Services Directive (PSD2).

What is Strong Customer Authentication (SCA)?

SCA is a regulatory requirement that is seeking to make online payments more secure and reduce fraud.

This means that places you buy things from have to authenticate you with at least two of the following three items:

– Something you know (eg password or pin)

– Something you have (eg phone or token)

– Something you are (eg finger print or facial recognition).

What will happen?

Over the coming weeks (or months) your bank will have to start declining payments that require SCA and don’t meet the criteria listed above.

Banks won’t be starting this straight away or all doing it all at the same time but you will soon see changes to the way you make a whole host of payments.

Different payment types are in and out of scope – remember this is a simple explanation of what will happen when you make contactless payments.

Some of your contactless payments will be declined – even if you have money in your bank account

Payments treated as contactless in the UK (i.e. below £30) are treated as ‘low value’ and exempted from SCA.

However, unfortunately, the exemption is limited.

When you have used a contactless payment option five times or when the sum total of payments exceeds the equivalent of Euro 150 your card issuer will need to request that you authorise the payment. Your bank will decide if they count 5 transactions or Euro 150 as the ‘trigger’ point.

This authorisation is likely to be ‘triggered’ by your contactless payment being declined and the payment will have to be requested and authorised by inserting your card in the machine and entering your PIN.

This will authorise the payment and enable you to make contactless payments against (until you next trigger the authorisation thresholds).

The machine may not instruct you to insert your card in the machine and the shop assistant may not know that the decline message on the terminal is the trigger for you to make the payment via the more traditional CHIP & PIN method.

Don’t be embarrassed when this happens to you – but you may need to explain what is happening to the shop assistant!

Exceptions to the rule

As you would expect there are some exceptions, this is a simple explanation so just two examples to illustrate:

– unattended payment machines like public transport barriers will still work even if you have breached the authentication threshold.


– Contactless payments made by digital wallets such as ApplePay are unaffected.

One last thing

This blog only seeks to provide a simple explanation on the impact of Strong Customer Authentication (SCA) on contactless payments.

Remember: If your contactless payment is declined then insert your card in the machine and use your PIN – then you can revert back to contactless payments.

….Or use a digital wallet like ApplePay to avoid this payment friction

In providing a simple explanation the expert will respond by stating that ‘I think it is a lot more complicated than that’.

Of course it is, but hopeful this simple explanation for contactless payments will be a first step in getting to grips with SCA!

Don’t forget that there are many other online payment types that are being impacted (disrupted) the impact of SCA .

A final point – don’t forget this initiative is trying to compact payment fraud, which is a good thing (right)!

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