The new rules require modern authentication. FIDO standards provide a secure and convenient way for the European payment industry to comply with the stringent authentication requirements of PSD2. FIDO Alliance authentication standards offer a scalable solution for the European financial ecosystem to meet PSD2 requirements for reliable user login and cryptographically signed transactions, satisfying both organizational and consumer requirements for transaction convenience.

FIDO authentication is based on open standards supported by a compatible ecosystem with over 800 certified FIDO solutions. Banks and payment service providers (PSPs) can choose from various leading providers of modern authentication solutions, or they can develop and test their own PSD2 solutions based on FIDO. After deployment, banks and service providers can accept various certified FIDO-compatible authenticators in the market, including mobile devices and PCs, as well as hardware-backed security keys. The end result is a simple user authentication approach that exceeds the requirements of PSD2 from the European Banking Authority (EBA).

The FIDO architecture offers a truly “best of both worlds” solution to the issues that led to the creation of requirements for multi-factor authentication, as defined in the final draft of the EBA Regulatory Technical Standards (RTS) on Strong Customer Authentication (SCA).