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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

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
  • We push boundaries by looking for innovative solutions that can empower our clients to achieve greater results.
  • We place our experience, commitment and professionalism to your service.
  • We are driven by our vision to shape and lead the Hungarian legal market and become a first choice law firm in our practice areas.

Firm's website: http://www.kcgpartners.com