The EU Payment Services Directive (PSD2), presents any business that processes online payments or provides account related services in the European Economic Area (EEA) with the challenge of balancing the Strong Customer Authentication (SCA) requirements with a seamless buyer’s journey. This is problematic because consumers are increasingly sensitive to any added friction and are voting with their feet. An estimated 70% of consumers abandon online forms due to poor experience. So the question is, how do you balance security with customer experience? To gain competitive advantage in the new PSD2 landscape, payment processors and merchants will need to collaborate closely to maximize SCA exemptions and reduce friction for those transactions subject to SCA requirements.
The Regulatory Technical Standards (RTS) have instilled the increased importance of fraud prevention. To retain control over the buyer’s journey merchants will need to work cooperatively with payment processors to reach the highest exemption thresholds. Successful collaboration can provide a major competitive advantage on a number of fronts:
• One click shopping: Being able to expedite payment processing for a higher volume of transactions, e.g. all transactions below €500 vs. only transactions below €30 (the default amount).
• Cost savings: Reduce the overall number of transactions subject to higher cost SCA checks.
• Reduced friction: Only step-up transactions above the exemption threshold or with risk signals to SCA.
This whitepaper presents how iovation’s solutions can help maximise SCA exemptions, and decrease friction for those transactions that are subject to SCA—allowing you to strike the balance between security and a positive customer experience.