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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: Card Networks Deploy Delegated Authentication: Everybody Wins!
Is “Fast Identity Online” (FIDO) Key to User Authentication and PSD2?
- As PSD2 makes strong customer authentication mandatory, all players’ largest concerns revolve around customer confusion.
- FIDO “Fast identity online” provides a common mechanism for authentication based on the device the user carries.
- The user always interacts with the same device/interface, and FIDO delivers a common method for ID.
- FIDO establishes a public/private key pair that will validate the user’s biometric.
- The clever use of public/private key pair ensures that the users biometric data never leaves the device.
- FIDO challenges can also include data to the consumer like dollar amount, payee ID, and other data.
With Delegated Authentication, card networks enable merchants to control the entire cardholder experience. Issuers reduce costs while consumers can use biometrics for online shopping and passwords slowly fade away.
With Delegated Authentication, qualified merchants can use their own authentication process to approve purchases or pass the cardholder’s FIDO-based credential to the network for approval.