Italian consumers and businesses have seen a clear change in online checkout since PSD2 Strong Customer Authentication (SCA) became standard. The regulation requires at least two independent factors—something you know (like a PIN), something you have (such as a phone or token), or something you are (biometrics)—for most electronic payments. While this adds steps to some transactions, it aims to reduce fraud and build trust in digital commerce across Italy.

SCA applies broadly to remote card payments and bank-based methods. Merchants, payment service providers, and banks have introduced app-based approvals, biometrics, and modern card protocols like 3-D Secure 2 (3DS2) to keep checkout flows fast and compliant. Exemptions still exist for certain low-risk or low-value transactions, but buyers can expect security prompts more often than before, especially for new merchants or higher amounts.

How PSD2 shapes flexible payment solutions

Flexible payment solutions—ranging from digital wallets to account-to-account transfers—must embed SCA at critical points. In practice, Italian banks often use push notifications and biometrics within their mobile apps to approve payments. When exemptions apply (for example, low-risk transactions flagged by real-time risk analysis), a frictionless flow may be allowed without an extra challenge. Merchants balance this by optimizing checkout design, ensuring clear instructions when authentication is required, and providing fallback steps if a customer’s device or connection fails.

For recurring or preauthorized charges, initial enrollment or the first payment typically involves SCA. Subsequent charges may be processed as merchant-initiated transactions when properly set up, reducing repeated prompts while staying within regulatory rules. This structure helps preserve convenience for services that rely on repeat billing.

Credit card options under SCA in Italy

Credit card options remain widely used, but cardholders now encounter 3DS2 challenges more frequently. Italian issuers commonly support biometric confirmation through their mobile apps, which speeds up authentication compared with older one-time passwords via SMS. If the issuer’s risk assessment permits, some payments can be approved without a challenge, preserving a smooth experience. Still, higher-value or unfamiliar transactions are likely to trigger SCA.

For businesses, card acceptance strategies often include monitoring challenge rates and optimizing data passed with transactions (such as customer history and device data) to qualify for frictionless flows when possible. Clear guidance during the challenge step—telling customers to have their phone or bank app ready—helps reduce drop-offs at the final stage of checkout.

Are deferred payment methods affected?

Deferred payment methods that schedule a payment for a future date must be aligned with SCA rules. Typically, SCA is performed at the moment the mandate or agreement is set up, or when the first payment occurs. Later payments may be treated as merchant-initiated when properly referenced. Italian users will notice that the first interaction can involve an extra step, but subsequent debits often proceed without repeated challenges if the original authorization and risk controls are in place.

For bank transfers initiated online, SCA is generally required at the initiation step. If the transfer is scheduled, the creation of the schedule may require SCA, while subsequent executions reference the initial approval. Clear communication about timing and expected prompts minimizes confusion and support tickets.

Installment payment plans and compliance

Installment payment plans, whether tied to cards or bank debits, are compatible with SCA when structured correctly. Usually, the first transaction uses SCA to authenticate the customer and bind the mandate. Later installments can be processed automatically as agreed, with exceptions if something changes (amount, schedule, or merchant). Italian issuers and acquirers typically demand accurate data linking each installment to the original authorization to maintain compliance.

From a customer experience standpoint, merchants can outline the steps upfront: which installment triggers SCA, what app or biometric will be used, and how changes to the plan will be handled. Transparent messaging reduces abandonment and supports accessible, compliant financing for larger purchases.

Buy now pay later options: what changes?

Buy now pay later options are popular in Italy for splitting purchases into short-term installments. Under PSD2, SCA normally applies when a payment is first set up or when the customer’s card or account is stored and charged. If a card is used, 3DS2 is common for the initial transaction; future charges may rely on merchant-initiated processing tied back to the original SCA. When a BNPL arrangement is funded via bank transfers, the initial setup or mandate creation usually involves SCA within the bank environment.

Customers can expect fewer repeated prompts once a plan is established, provided each subsequent charge follows the agreed parameters. If amounts or schedules change, or if the risk profile shifts, an additional challenge can be requested by the issuer or bank to keep the transaction secure.

Practical steps for Italian merchants

Merchants in Italy can improve outcomes by adopting app-based authentication flows, enabling biometric approvals where available, and collaborating with payment partners to leverage risk-based exemptions responsibly. Streamlining the checkout layout, offering clear instructions, and providing backup routes (such as SMS OTP only when biometrics are unavailable) help reduce friction.

It is also helpful to localize support content for Italian users, highlight expected authentication moments for installment and deferred methods, and ensure customer service teams are prepared to explain steps in simple terms. Finally, monitoring data on challenge rates, abandonment, and approval outcomes can reveal where to refine wallet, card, and account-to-account options.

What Italian consumers should know

Consumers benefit from stronger protection against fraud but should prepare for occasional prompts to confirm identity. Keeping a banking app updated, enabling biometrics, and ensuring reliable mobile connectivity can make authentication quick. When choosing flexible payment solutions, consider whether your bank supports biometric approvals and check how your preferred merchant handles authentication for recurring, deferred, or installment payments.

If a challenge appears unfamiliar, verify the merchant, review the amount, and use the secure approval method provided by your bank. Most flows are designed to minimize friction while maintaining high security for online shopping and local services in your area.

Conclusion

PSD2 Strong Customer Authentication has raised the security baseline for online payments in Italy while nudging the market toward modern, app-first verification. Card payments, deferred charges, installment schedules, and buy now pay later options remain viable when their first step is authenticated correctly and subsequent charges follow compliant references. With careful design and clear communication, merchants and consumers can achieve both protection and convenience across everyday digital transactions.