Strong Customer Authentication
Is your education business located in Europe? If so, recent regulations have been introduced regarding online payment processing that will affect how your customers pay for your education services. Strong Customer Authentication (SCA) is a new European regulatory requirement taking effect on September 14, 2019 to reduce fraud and make online payments more secure. This regulation applies to transactions where both the business and the cardholder’s bank are located in the European Economic Area (EEA).
Once SCA goes into effect online payments for European customers will require additional customer authentication to complete transactions, and transactions that don’t adhere to the new guidelines may be declined by your customers’ banks.
Fortunately for companies that use Teachworks, our Stripe Integration for payment processing has already been updated to support these new SCA regulations and will automatically handle customer authentication during the payment process.
When a client pays an invoice or saves a credit card, if the client’s bank requires authentication they will be automatically prompted to authenticate the transaction. Payments requiring authentication will trigger 3D Secure (often known by its brand names, “Verified by Visa” or “Mastercard SecureCode”), which typically adds an extra step in which the cardholder must provide additional information, such as a one-time passcode or biometric ID. Once authentication is completed the transaction can be processed as usual.
Teachworks’ Stripe Integration supports clients paying invoices on their own (on-session payments), as well as companies charging credit cards on behalf of their clients (off-session/merchant initiated). Below are examples of how SCA would work in these two types of transactions:
Scenario 1 – Client Pays Invoice on Their Own (On-session Payments)
The client will follow the usual process of clicking the “Pay Online” button on their invoice and can either enter credit card details or select a saved credit card (if they are logged into Teachworks). If the client’s bank requires SCA confirmation the client will be prompted automatically during the payment process.
Scenario 2 – Charge Client Credit Cards on Their Behalf (off-session Payments)
When clients save credit cards they will be indicated to allow off-session transactions. However, when charging a client credit card on their behalf, the client’s bank may require authentication. You can bring the client on-session to complete the payment by emailing them their invoice where they can enter their credit card details and authenticate the payment.
You can use the “Bulk Invoice Email” feature to notify clients that their invoice payment was declined and to complete the payment on the invoice.
Scenario 3 – Client Saving Credit Card
Credit cards can be associated with your customers’ profiles in Teachworks (card details are stored securely in Stripe). When a client saves a credit card, if they are prompted to authenticate the card for future off-session payments they will automatically be prompted to do this and upon successful authentication the card will be saved.
Teachworks has also added a “Charge Consent” field to the Stripe Integration settings. If SCA applies to your business and you charge cards on behalf of clients, you will need to display a consent message regarding how you will be charging their credit card (ie. the frequency, amount, services), or you can include a link to your company’s terms that the client is consenting to. This will appear in locations where clients save their credit card for future transactions.
If you have any questions or concerns about the Strong Customer Authentication, please email our support team for more information.
Are you a European tutoring company looking for tutoring management software that offers SCA compliance? Teachworks has you covered. Sign up for a free 3-week trial!