In tracking the effects of SCA (Strong Customer Authentication) for online purchases, one needs to ask if there are alternative options for merchants to avoid the high abandon rate? For August 2021 and according to the latest data CMSPI Failure Rate Tracker there has been an average failure rate of 26% across the EU which could in effect result in EUR 82b of sales being at risk due to abandonments or payment declines.

Are SCA requirements providing too much friction for customers to complete transactions?

There is a critical balance between customer experience and security but this should not come at the expense of the merchant if it can be avoided. Merchants are consistently left with looking for ways to provide seamless checkout experiences which will lower cart abandonments and increase their revenues.

SCA is in place due to the high levels of online fraud and therefore aims to make online payments more secure and reduce fraud levels. 3D Secure 2 (3DS2) or 3D Secure (3DS) adds an extra layer of identity confirmation before the user pays so that transactions meet the SCA rules. 3DS2 has recently replaced 3DS which is a smoother checkout process for the payer. 3DS2 requires 2-factor authentication, and will ask users for 2 out of 3 pieces of information to complete their transaction:

  • something the user is, for example, their fingerprint
  • something the user has, for example, their phone
  • something the user knows, for example, a password

Usually, this means the user will have to enter a short code sent by SMS by their bank. Transactions processed through digital wallets (such as Apple Pay or Google Pay) meet the 2-factor authentication requirements.

Although 3DS2 and SCA play a cc There is a need for e-commerce payments to be addressed to assist merchants to decrease their abandonment rates as well as help to decrease online fraud.

WIZZIT TapOnPhone we believe is the next-generation online payment solution that addresses the challenges currently experienced for online payments. Online payments should be as simple as in-App payments or in-store payments.

Using WIZZIT’s TapOnPhone will avoid the legacy online systems which require customers to input their card details and addresses etc and will simply require the customer to tap, enter their PIN and ‘go’. Not only is this a better customer experience, but it also creates a card-present type of transaction that will decrease online fraud rates and alleviate any chargebacks for the merchant. It will also shift the liability from the merchant to the issuing bank.

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