Tech Peak » ‘Stronger’ Strong Customer Authentication Boosts Fraud Prevention

‘Stronger’ Strong Customer Authentication Boosts Fraud Prevention

by LoginID
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Many countries accept electronic signatures to help companies and organizations improve their services and business operations. To enhance their management and workflow processes, businesses also use technology like digital signature authentication and delegated authentication, among many others.

E-commerce has seen a rise in digital wallets and mobile payments. With more businesses and customers relying on online transactions and mobile digital wallets, it is becoming increasingly difficult to implement strong authentication methods like PSD2 and Payment Service Directive.

Some merchants and issuers had difficulties implementing PSD2 (Payment Service Providers Directive), which was implemented in Europe. Due to the long implementation cycles and high implementation costs, e-commerce in Europe had high abandonment rates. Fraud can still happen despite strong authentication systems for customers.

Regarding PSD2 requirements for strong customer authentication, there are two categories involved wherein the first one is the need for multifactor authentication or MFA in at least of the two elements below should be included.

  1. Something known – PIN or a password
  2. Something owned – mobile phone, laptop, security key
  3. Something you are – a biometric like a fingerprint or face ID


The second requirement details that authentication devices should maintain the independence of these methods. It means that meeting a strong customer authentication standard also involves the device, ensuring that the authentication elements are not interacting with one another.

It is possible to create and use mobile wallets and mobile payment apps using modern technology. Businesses and other organizations are using these features to offer seamless online experiences for customers. To strengthen their cybersecurity and prevent fraud, enterprises add more robust authentication methods to their systems.

These guiding principles are intended to assist in fraud prevention online. It is important to note that not all authentication methods are the same. Some multifactor authentication methods can be more secure than others. 

Today, fraudsters utilize various combinations of tech-savvy frauds and social engineering methods to navigate around safety measures of MFA, which is considered the heart of strong customer authentication. Online retailers, third parties, and issuers should consider how to navigate around these weaknesses and address various concerns to ensure a safe and secure environment for their customers. 

There are three primary means wherein fraudsters bypass strong customer authentication. The first is a social engineering attack involving phishing or man in the middle (MITM) attacks designed to fool the user into providing personal information. Another type of bypassing strong authentication measures is SIM swapping, wherein the fraudster pretends to be the mobile phone owner as they contact the phone company. Lastly, there is the malicious accessibility wherein hackers exploit a known software or filmware vulnerability. In this attack, the hacker discovers a vulnerability in the software before fraud prevention measures are taken.

Ensuring more potent, strong customer authentication methods is vital for businesses, especially when it comes to creating practical and effective ways to prevent fraud in the online world.

For more information about strong customer authentication to boost fraud prevention and help you secure private authentication for the future, you may visit

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