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Strong Customer Authentication is Obligatory from 1 January 2021

Strong Customer Authentication is Obligatory from 1 January 2021

Hungary
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The extended deadline for implementing Strong Customer Authentication (“SCA”) expires on 31 December 2020. Originally, Hungarian laws prescribed 14 September 2019 as a deadline for the implementation of the new SCA, however, in parallel with the decision of the European Banking Authority, a new deadline has been set to 31 December 2020 by the Hungarian National Bank.

SCA was introduced as a part of the 2015/2366 Directive on payment services in the internal market in order to fight e-commercial frauds among the European Union. SCA is a multi-factor authentication method, as it requires two identification factors. These factors can be knowledge (something only the user knows, e.g. PIN code), possession (something only the user possesses, e.g. mobile phone), or inherence (something the user is, e.g. fingerprint). It is advised by the European Banking Authority to use biometric data for authentication as they are less easily reproduced and they cannot be forgotten.

According to the Directive, SCA is required for accessing payment account online, initiating electronic payment transactions, or in cases where there is a risk of payment fraud or abuse through a remote channel. However, SCA will not be required if the payment in question is under EUR 30 as it is considered a “low-risk transaction”. Nevertheless, if this exemption is used five times in a row or the aggregated amount of the exempted payment exceeds EUR 100, SCA will be needed.

By Rita Parkanyi, Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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