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Zuora Staff

August 15th, 2019 Update

 

In light of the EBA's decision to grant individual countries the ability to request an extension to the September 14 deadline for SCA compliance, Zuora is continuing to develop integrations to the gateways as discussed in the July 2019 update. It is Zuora's plan to meet the September 14 deadline.

 

As of today, CyberSource's 3DS2 solution is in Zuora's production environment and Adyen's is in Zuora's sandbox environment. If you want to enable this feature for your Zuora tenant, contact Zuora Global Support.

 

Additional documentation for PSD2 and SCA is now available on our Knowledge Center.

 

July 2019 Update

 

This community post will help our customers understand the new PSD2 regulation, how it impacts them, and what they need to do to prepare.

 

What is PSD2 and when does it go into effect?

 

PSD2 is an extensive revision of the European Union’s “Payment Services Directive” regulations. PSD2 will be going into effect on September 14, 2019. It applies to online transactions where both the issuing and acquiring banks are located in the European Economic Area (EEA).

 

PSD2 objectives are the following:

  • Standardize regulations and integrate the market for payment services across EU countries
  • Ensure fair competition and transparency
  • Open payment services ecosystem and reduce bank monopoly on providing services by mandating that, upon account holder consent, they make account data available by API to third-party service providers

 

What is SCA and why is it important?

 

SCA stands for Strong Customer Authentication and is one of the mandates of PSD2 that is most applicable to Zuora customers in the European Union. The SCA regulations are designed to protect consumers. While many tools exist to reduce fraud, one of the most effective is authentication – validating a customer’s identify before they pay online. 

 

With SCA, all electronic transactions will need authentication, using at least two of three possible methods:

 

  • Knowledge: something only the user knows, such as a password
  • Possession: something only the user possesses, such as a token or mobile phone
  • Inherence: something the user is, such as a biometric (e.g. fingerprint recognition)

 

Zuora recommends using 3DS2 (3DS v2) to provide your customers with SCA for European customers. 3DS stands for 3D Secure, an open standard used by major credit card brands to authenticate cardholders. 3DS can dramatically reduce fraud and increase authorisation approvals and is one of the ways for Payment Services Providers to comply with the SCA mandate. Starting September 14, 2019, issuing banks can decline certain payments that require SCA, but have not gone through authentication.

 

If your merchant account provider is based in the EEA - and you transact with customers in the EEA - you will need to do some work to prepare for this change. If you do not know who your merchant account provider is or where they are located, check with your gateway. For subscription businesses, merchants only have to present the 3DS flow on the initial purchase. Subsequent recurring subscription purchases are generally considered exempt from PSD2 and SCA unless the issuing bank declines the exemption.

 

3DS vs 3DS2 - what’s the difference and why is it important?

 

3DS (3DS v1)

3DS2 (3DS v2)

Why is it important?

For payment cards only

Also supports mobile and digital wallets

Greater flexibility and support for mobile e-commerce

Designed for web desktop

Streamlined for mobile interaction models/devices

3DS2 adoption expected to be greater because it is easier to use

Higher false declines

Modified authentication flow

reduces false declines

Customers likelier to abandon transaction or use a different

payment method

No merchant opt-out or exceptions

Lower-value transactions exempted from validation, depending on the merchant's fraud rate

Greater flexibility and alignment of the protocol to the risk of a particular transaction

10 data points captured

Up to 150 data points captured

Issuer can make better decisions about the validity of the transaction with more data, preventing both fraudulent transactions as well as false positives

 

How Zuora is helping you comply with PSD2

 

Zuora provides seamless integration with your payment gateways, simplifying and automating collections. Zuora plans to integrate to each gateway’s 3DS2 capabilities. If your gateway is compliant and is providing a 3DS2 solution, Zuora intends to integrate to their solution by the September deadline.

 

Specific Payment Gateway Support for PSD2

 

Zuora is currently planning to enhance payment gateway integrations that support SCA through 3DS2 in advance of the September 14, 2019, PSD2 deadline. As of July 29, 2019 the following Gateways have provided us with their 3DS2 solution and Zuora is actively developing the integrations:

 

  • Adyen*
  • AmazonPay
  • Bluesnap
  • Braintree*
  • Cybersource*
  • Ingenico ePayments
  • Ingenico (GlobalCollect) - this will require a migration to Ingenico ePayments for credit cards
  • JPMorgan Chase Paymentech Orbital*
  • Stripe*
  • Worldpay*

 

*These payment gateways may require a version update, migration or an additional feature to enable 3DS2 functionality; we recommend speaking directly with your gateway contacts as soon as possible.

 

Zuora is currently not planning to enhance support for the following payment gateways, because they either do not transact in the EEA or they have informed Zuora that they are not applicable to PSD2 (if these gateways do become applicable to PSD2 requirements and they provide Zuora with their 3DS2 integration, Zuora currently plans to provide support for these integrations at a later time):

 

  • Allpago
  • Authorize.net (migration to Cybersource required)
  • Bambora
  • CardConnect
  • FirstData
  • FIS Worldpay (Vantiv and Litle)
  • GlobalCollect (will require credit cards to be processed through Ingenico ePayments)
  • GMO
  • GoCardless
  • Merchant eSolutions
  • Moneris
  • NMI
  • PayPal Adaptive
  • PayPal EC1
  • SIA
  • Slimpay
  • Softbank
  • Sony

 

As part of your comprehensive PSD2-compliant solution, Zuora currently intends to provide the following:

 

  1. SCA-compliant implementation of 3DS2 with your 3D Secure gateway
  2. Hosted Payment Pages updated to support 3DS2, where applicable. Our HPM will redirect to the gateway’s 3D Secure URL, which that service will determine if a challenge question is required. If challenge question fails, payment method will not be stored in Zuora, if it passes, payment method with CAVV and XID to be included with payment request.
  3. If using direct POST, customer will work with MPI of choice and pass the CAVV and XID via API to Zuora to store with payment method.

 

What will I have to change in my tenant?

 

  1. Update your HPM page configurations
    1. Note: We will support 3DS2 via embedded iFrame as long as the gateway the customer is using is 3D Secure compliant and is in the list referenced above.
    2. If you use direct POST support, merchant will need to work with their MPI provider of choice and pass the necessary IDs down to Zuora via API. Zuora will store these and pass it to the gateway via our integration.
  2. Update your gateway configurations to use a version that supports 3DS2.
    1. Note: Some integrations may support 3DS2 without requiring an update.

 

Additional documention for PSD2 and SCA is now available on our Knowledge Center.

 

For existing recurring transactions, we will align to the gateway specifications. Details will be provided by the gateways, and Zuora currently plans to provide guidance on any changes required within your tenant. For questions, please post in the comment section below or reach out to your gateway provider directly.

17 Comments

We use Stripe for our payment gateway with hosted pages - do they support PSD2 and when will the Zuora integration to Stripe support it ?
Thanks

Zuora Staff

Hi Ian,

 

We will be sending out a more official statement next week on how Zuora intends to help your organization comply with PSD2 and what you need to do, including which gateways will be ready by September 14th. Please stay tuned.

 

Thank you,

Tyler

Hi, Braintree is not listed as one of the included or excluded gateways does this mean you're not developing an integration for this?

 

Thanks

Scott

Zuora Staff

Hi @scottw_deputy - thanks for the catch! Yes - Braintree is included. We've updated our post.

Zuora Staff

@IanBennett - We have updated this page with new information for PSD2. Please let us know if you have any additional questions. Thanks so much!

@JustinLi Thanks for the update, can you clarify what "*These payment gateways may require a version update, migration or an additional feature to enable 3DS2 functionality" means? The KC page states that the integration with Braintree is using v2.81.0 of the Braintree Java JAR, are you saying we as a Customer need to confirm that 3DS2 works with this version or is this for something else? 

 

Also when you say you're planning on releasing the enhancements before the 14th of September when exactly is this? Can we get a pre-release of the code in a Sandbox somewhere?  

 

 

Honor Student

How and when will we be informed of the changes that need to be made on our side?

Hi @JustinLi do you have an answer to my question from above in relation to Braintree versions and whether there's a dev environment we can connect to?
Thanks

Scott

Honor Student

Stripe released APIs for managing payments (both one-off and for subscriptions) a lot of time ago. It is possible update the integration by looking at the public documentation and the Stripe API reference. As for subscriptions, it is possible to refer to the following flows:
Scenario 1: On-session First payment - Immediate charge: https://stripe.com/docs/billing/migration/strong-customer-authentication#scenario-1
Scenario 2: Off-session First payment - Charge later: https://stripe.com/docs/billing/migration/strong-customer-authentication#scenario-2
Scenario 3: Off-session Recurring payment (from the second charge onwards): https://stripe.com/docs/billing/migration/strong-customer-authentication#scenario-3
Scenario 4: One-time invoices: https://stripe.com/docs/billing/migration/strong-customer-authentication#scenario-4
I report below also the API reference that could be useful: https://stripe.com/docs/api

Hi

I have spoken to Braintree and they've said we need to make sure 3D Secure is enabled on our Braintree Account, however they couldn't confirm if it's version dependent. Can you please confirm this is going to work with the version you're developing the integration with? Also as our Subscription amounts vary month by month (as we're predominantly usage based) we need to submit transactions with either the recurring or unscheduled transaction flag to ensure the transactions (ongiong payment requests) are classified as exempt from PSD2 requirements. Link to the flags on the Braintree Dev site are at https://developers.braintreepayments.com/reference/request/transaction/sale/php#transaction_source Are these being supported in the update?

 

Please respond urgently as we need to start development in parallel with you and no response means we are unlikley to hit the deadline being mandated

Zuora Staff

Hi @scottw_deputy,

 

It sounds like your conversation with Braintree might have been a little confusing since it sounds as if they assume you'll be doing all of the development which is unnecessary when using HPM so I want to clarify.

 

Our latest version of Braintree will support 3DS2 in both the HPM and via direct POST. Direct POST will require additional work, but I believe you are using the HPM so I will not touch on that. As part of the integration, we will be providing the challenge directly within the iFrame of HPM as well as flagging transactions with the recurring flag for you. There will be a requirement for you to get the 3DS2 feature enabled in your Zuora tenant(s), but that is all from our side.

 

If there is anything else you need to do for enablement then Braintree should be able to answer those.

 

Thank you,

Tyler 

New Student

Hi,

 

We are using Stripe payment gateway, where-in we save customers' cards on Stripe and create CreditCardReferenceTransaction payment method on Zuora. How will such a kind of integration be supported and how should we design our workflows?

Senior Tutor

Hi 

 

 

 

Savvy Scholar

Hi,

We are using HPM with BlueSnap as our payment gateway.

I couldn't understand if there is any action needed from us.

Thanks,

Guy

Zuora Staff

Hi @arpan and @bteleky,

 

If you are generating your tokens outside of Zuora and importing your tokens to CCRef payment methods within Zuora then you are susceptible to SCA challenges within your solution where you are creating the token. You will need to work with Stripe to understand what needs to be done with your integration for 3DS2 compliance.

 

@gbarak, the first thing I would recommend is that you contact BlueSnap and make sure you are required to enable 3DS2 on your gateway as I believe Outbrain is domiciled in Israel. If so, you will not need to perform a migration or upgrade to a new version. The only requirement should be that you will need to submit a Support ticket to enable 3DS2 on your tenant(s) and then check a box within your gateway on each tenant to ensure that customers can be challenged. The details of this will be covered in the documentation for the gateway when it becomes available.

Advanced Tutor

@TylerS that answer for stripe seems to apply to the intial capture of the card. What about further payment attempts generated from the Zuora end after the initial token is created? 

Zuora Staff

@lancehendrickso if you are using a tokenized approach for capturing cards, there would likely be a need to pass back the NTI (network transaction id) into Zuora, from the gateway. If there is a challenge after the initial attempt then that would be handled either via the approach created in the initial transaction or via a credit card capture in Zuora's hosted payment pages 2.0.  The latter of these (via hosted payment pages 2.0) would not create a tokenized credit card, but rather create a payment method with the actual credit card information.