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A quarter of retailers missing an opportunity by ignoring new SCA online payment rules 


Strong Customer Authentication (SCA) for all online transactions exceeding £25 was introduced in the UK in March – yet many companies are yet to do anything about it, even though it does more than just tackle fraud and can offer some real business advantages.

According to a study, 73% of UK retailers have a solution in place to comply with Strong Customer Authentication (SCA) rules, which came into effect in March 2022.

The research, conducted by Censuswide for payment firm Adyen, shows a marked improvement from a similar study shortly before the March deadline, when only 56% of businesses said they were prepared for the new rules. But those that don’t comply, risk damaging their customer experience at a time when every transaction counts.

The cost of living crisis means competition for the share of diminishing wallets will be fierce in the coming months. That, coupled with the ‘make-or-break’ peak sales period, means retailers need to do all they can to remove friction from the purchase process.

The new SCA mandates were brought in to help prevent unauthorised use of consumers’ payment cards. But, critically, they will also help improve the customer experience. Firstly, it will increase the chance of a transaction being approved as more and more issuing banks adopt the new rules.

Secondly, the share of retail transactions made via mobile and digital wallets is now 32%, so a large proportion will be processed using streamlined authentication flows such as biometrics, which make identifying yourself as simple as a tap or a smile.

On top of that, with the right payments provider, many SCA checks can be completed in the background while the customer completes the transaction without them even noticing. Ultimately, the mandate should be removing friction from the customer experience, not adding to it.

 “With costs rising and supply chain challenges making it harder for the sector, customer conversion rates are crucial,” explains Colin Neil, UK Managing Director at Adyen. “Getting SCA right at this stage will not just keep you on the right side of the Financial Conduct Authority; it will help you close more sales and build trust with your customers.”

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