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Payments methods SCA
Payments methods SCA

Payments methods – New SCA timetable highlights scale of challenges for merchants

New report lists the key questions merchants should ask their payments partner

Payments methods – New SCA timetable highlights scale of challenges for merchants

In May 2019, Stripe commissioned 451 Research to survey EU merchants’ SCA readiness. Their analysis found that SCA would cause a €57 billion drop in online purchase volumes in 12 months. Moreover, many merchants faced being non-compliant on the original 14 September deadline, and even more risked losing customers to sub-optimal implementations.

Now, after the European Banking Authority extended the enforcement deadline to 31 December 2020, they have updated this report with a new foreword highlighting the need for urgent action. The extra time is an acknowledgement of the challenges merchants face in achieving compliance while safeguarding their sales and customer relationships. It is not a cause for complacency – Payments methods.

Preferred Online Payment Method By Country
Preferred Online Payment Method By Country


The Strategic Importance of Payments is Increasing – Payments methods SCA

Well over three-quarters (87%) of online businesses in Europe agree that SCA will increase the importance of payments as a competitive differentiator, rising to 95% of those with more than 5,000 employees. We share this sentiment and believe SCA will enhance the strategic power of payments by magnifying their impact on conversions and the overall checkout experience. Two areas in particular – 3D Secure 2 and exemption management – will require deep payments expertise to effectively address SCA.


Many authentication methods have a disconnect between user experience and perceived security
Many authentication methods have a disconnect between user experience and perceived security

451 Research have included a checklist for merchants to audit their payment processor, and ensure their current partner can protect their business from non-compliance and lost sales.



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Don’t underestimate the impact SCA will have on your business.

Our survey indicated that many online businesses appear to be underestimating the complexity and impact of SCA. Merchants must recognize the financial implications of SCA and the toll that poor checkout flows would take on their customer base. As a starting point, we advise that you immediately determine the ability of your primary payment provider to deliver an optimized SCA checkout flow for your business and handle the complexity of implementation and ongoing SCA management.

Ensure your payment provider can minimize friction for your customers.

Online businesses should press their payment provider on not only its readiness to support SCA, but its ability to do so in a way that minimizes customer friction. Items on the checklist should include support for in-checkout dynamic authentication via 3DS2, machine learning and built-in exemption logic. Payment providers that have been actively engaging industry stakeholders (e.g., card networks, banks) and have a position on the issuing side of payments are in a particularly strong position to optimize the customer experience.

Prioritize and optimize exemption management.

Exemptions are a critical way for online businesses to minimize checkout friction for customers. Online businesses should ensure their payment provider can handle all aspects of exemptions for their business, from identifying and automatically applying them to triggering an SCA request and resubmitting the transaction if a bank declines the exemption. Given the importance of the TRA exemption, merchants will also want to understand their payment providers’ fraud rates to ensure they can take advantage of TRA in the first place. We believe those providers with integrated fraud/risk management and machine learning capabilities as part of their payment platform will be best suited to help online
businesses take advantage of this exemption.

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Approach payments strategically. 

Merchants that only look at payments through the lens of cost mitigation are missing the bigger picture of how payments have become a direct input into the customer experience, business growth and conversions. If nothing else, SCA should reaffirm the increasing strategic importance of payments for online businesses and deliver the inflection point needed to reassess their payments partner ecosystem and the value they deliver.


Payment processor audit checklist & update highlights

Full report


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Payment Systems


Payments methods SCA


Mia Turner


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