Exemptions from strong authentication
The second Payment Services Directive (or PSD2) requires strong authentication for payments when the buyer is present at the time of purchase, but also provides for cases where interaction with the buyer (challenge) is not mandatory. To qualify for frictionless authentication, the payment must be eligible for an exemption. Here are the cases provided for by the PSD2:
- Recurring payment: Only the first payment is subjected to strong authentication for the total amount of the installments.
- Trusted beneficiaries: The buyer can add the merchant to his or her trusted list upon authentication. The following payments will be exempted from strong authentication even for amounts > €500.