FEA: Advanced electronic signature for secure online payments

What is FEA?

The Advanced Electronic Signature, known in Italian as FEA, is a validation system that goes hand in hand with the Digital Mandate. These are two instruments that allow online signing of documents and the execution of recurring payments. The Digital Mandate allows documents and procedures to be dematerialised because it makes use of the FEA: a recognition tool that has legal value and protects sellers and buyers in the event of possible disputes. Moreover, as required by law, it guarantees the conservation of the signed document for 20 years. The peculiarities of the FEA are described and highlighted in Article 26 of the eIDAS Regulation and are then further defined by the Italian Dpcm of 22 February 2013, whereby the Advanced Electronic Signature is required to meet four fundamental parameters:

• First of all, it is necessary to match the information of the signatory with his own signature, so the correspondence is always verified;
• The second parameter takes into account the certification that the signatory is actually the person he claims to be (the digital version of the verification of an identity document to ascertain the identity itself);
  • The third cornerstone focuses on the security of the data used by the signatory, which are protected by multi-factor authentication systems;
• The fourth parameter looks at the documentary quality which, being digital, needs to be secure, certified, and unchangeable.

These factors guarantee the possibility of taking advantage of a system of signature and document exchange that complies with the principles of IT security (so-called CIA): namely, to have digital documents that are confidential (private), integral (intact, not corrupted) and accessible (easily accessible). The FEA is a validation tool both in terms of identity verification and in terms of ensuring there are no ex-post changes with respect to what has been stipulated and signed. This is because the documents are “stamped” through a tool called hash, which crystallizes them.

Payments in Europe and the Digital Mandate: How does it work?

The Digital Mandate is not exactly new. In fact, for some time now, monthly or periodic direct debits have been authorized on a person’s current account to pay telephone bills, telephone or satellite TV subscriptions. The Digital Mandate, however, represents a further step. Firstly, because it allows the dematerialisation of documents, which can be kept in pdf format. The Digital Mandate, in fact, applied to SEPA Direct Debit (SDD) payments has given birth to the first continental solution. In fact, anyone who wants to collect money within the SEPA area can use the Digital Mandate. Through this virtual document, the company to which the end customer (or debtor) owes a sum, is authorised to withdraw that money from his current account. At the same time, the company itself is authorised to collect from the bank by direct debit.

The benefits of the advanced electronic signature for online payments

The Advanced Electronic signature offers the possibility of more secure, efficient and stable transactions and valid payments throughout Europe. This is a simple procedure that makes use of few steps, as in the case of Fabrick’s SEPA Direct Debit solution. In this case, the customer communicates his personal data, shares his phone number, then enters the IBAN (which can be verified in real time), proceeds to upload the identity documents to be recognised, and finally, by entering the OTP code, can digitally sign the document. The creditor will thus receive access to the replacement archive from which he can retrieve the mandate at any time (in any format, typically pdf).

Finally, the FEA guarantees various possibilities that make online payments easier and “attractive” for customers, allowing them to improve the user experience and, consequently, increase business opportunities. Firstly, because the delays that characterise analogue processes are avoided. There is no need to go to a physical place, perhaps even having to respect set times. Another key advantage is that in this way the whole authorisation process is streamlined and speeded up. Secondly, by applying the FEA to those documents such as the SDD Mandate, a company has the opportunity to collect direct payments on its direct payments account, protected by a document signed in a secure and transparent manner, without the possibility of any change. At the same time, the customer knows exactly what he has signed and can protect himself from any ex-post changes.