PSD2 SCA & Dynamic Linking

Designed for banks and fintechs, Keyless ensures PSD2 SCA compliance with two-factor authentication and in-built dynamic linking.

What is PSD2 SCA?

PSD2 Strong Customer Authentication (SCA) is a regulation that applies to all banks and payment providers in the EU. It requires that customers are authenticated using at least two independent factors from the following categories:
  • Something the user knows (like a PIN or password)
  • Something the user has (like a phone or hardware token)
  • Something the user is (like a fingerprint or facial recognition)
On top of this, PSD2 also requires dynamic linking. This means that when a customer approves a transaction, it must be tied to both the exact amount and the recipient’s account details.

Example

If a customer approves a €500 payment to account A, but a remote attacker tries to change the amount to €5,000 or switch the recipient to account B, the transaction must fail. Dynamic linking ensures that any change to the amount or recipient breaks the approval and requires a new, verified confirmation.
This approach helps prevent fraud - even if a login or device is compromised - by making sure each transaction is explicitly authorised by the right person.

What’s Changing with PSD3?

PSD3 is expected to come into effect in 2026, introducing stricter rules around fraud liability and consumer protection. One of the key changes is that banks and payment providers will face greater responsibility if unauthorised transactions occur.
This makes it even more important to prove that the right person approved each action. By combining biometric authentication with dynamic linking, organisations can reduce fraud risk and demonstrate compliance - helping to meet the higher standards set out under PSD3.

Benefits of Dynamic Linking for Banking Compliance

For banks, meeting PSD2 Strong Customer Authentication requirements means proving two things: who the user is, and what they’re approving.
Dynamic linking ties each transaction to its exact amount and recipient. When combined with biometric authentication, it confirms both the user's identity and intent in real time.
This stops fraud even if a device or credential is compromised - and keeps the approval experience simple and compliant.

Two factor authentication, one user action

Keyless is multi-factor by design, verifying a user's face and their device with a glance, fulfilling the mandate's MFA requirements.

Dynamic linking for payment authorization

Every transaction is tied to a unique code that includes the amount and recipient - meeting PSD2’s dynamic linking requirement without extra user effort.

Case study: International Bank

An international bank based in the EU was looking for a PSD2 SCA-compliant authentication solution that offered dynamic linking without increasing user friction.
Keyless was chosen due to its unique ability to independently authenticate possession and inherence without centrally storing biometric data.
Read Case Study

Why Choose Keyless for

PSD2 SCA and Dynamic Linking

PSD2-Compliant Multi-Factor AuthenticationDynamic Linking for PaymentsStreamlined User ExperienceProven Success with Banks

Authenticating payments

Listen to our Co-Founder and COO Fabian Eberle explain what Strong Customer Authentication is.

The Keyless Advantage

Security
Multi-factor authentication with true identity assurance—so only enrolled users can authenticate.
Privacy
No biometric data stored anywhere, eliminating privacy risks and centralized cloud repositories.
Cost
Self-service account recovery that cuts SMS OTP, call center, and IDV re-onboarding costs.
User Experience
Passive liveness in under 300ms—5x faster than competitors—on any device with a front camera.
Integration
App, web, and mobile browser deployments via cloud or on-prem, with backend bulk user enrollment.

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Related Resources

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