The Royal Bank of Scotland’s (RBS) banking app Bó has suffered yet another setback after it had to send out new cards to 6,000 customers as their old ones were non-compliant with the EU’s strong customer authentication (SCA) rules.
The venture was set up as RBS’ answer to the competition from new challenger banks like Revolut, Monzo and N26. Bó is part of NatWest, which is owned by RBS.
However, things have seemingly not gone according to plan. Since Bó was launched in November 2019, it has been accused of posting fake reviews, been deemed difficult to operate, a smattering of fraudulent accounts being opened at the launch and it has been revealed that the executive spearheading the project will leave RBS.
And now Bó has been forced to pull back 6,000 cards because it did not comply with the EU’s SCA rules, according to The Telegraph. Bó is replacing the old cards, which will have to be destroyed.
“In order to comply with new legislation designed to protect customers from fraud and increase security around all forms of payment, Bó will be re-issuing cards to all customers who received their Bó card before January 3 2020,” RBS told the publication.
The SCA rules are part of the EU’s Revised Payment Service Directive (PSD2). The rules force digital payment providers to ensure that they have verified that the people paying are who they say they are. The customer authentication process means customers must be verified through two out of three ways.
The SCA rules state that customers can be verified with what they know, what they have and what they are.
What they know can be things like a PIN code and what they have could simply be a credit card or a phone.
What they are has often been interpreted as them having to subject themselves to some sort of biometric verification process like a fingerprint scan. Although, the European Banking Authority has also suggested that some left-field methods like heartrates and even how customers type could be acceptable methods for verifying that customers’ identity in this way.
The SCA rules were supposed to be enforced in September 2019, but after several industry leaders expressed fears that they would not be able to implement them before the deadline, the deadline was postponed by 18 months. The Financial Conduct Authority has agreed on a phased roll-out of the rules. The final deadline for financial services firms and FinTech ventures like Bó is set for March 2021 in the UK.
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