Georgian central bank sets two new rules to reduce fraud that will come into force this month

A strong customer authentication rule and a new regulation on card-based instruments that will contribute to reducing fraud and secure the rights of customers will come into force this month, announces the National Bank of Georgia (NBG).

Strong customer authentication is a new European regulatory requirement to reduce fraud and make online payments more secure. 

The rule applies to commercial banks, registered payment service providers and microfinance organisations when serving customers remotely (for example, when changing the password or mobile phone number of a customer).

The NBG said that strong user authentication should be accomplished using two or more of the following elements: knowledge (that only the user knows), possession (that only the user possesses), and uniqueness (that the user owns, such as user biometrics).

As for the second rule, in order to create a common standard for all players of the market the NBG applied the card-based instrument rule to non-banking entities, registered payment service providers and microfinance organisations, in addition to commercial banks.

This regulation for the first time regulates the payment of goods or services by card instruments. 

Part of the acquisition services, such as trade / service relations and technical support, may be performed by another regulated entity called a sub-acquirer. The provision also covers the concept of marketplace platforms.