Barclaycard, the UK’s leading acquirer, has analysed its transaction data from 14 and 15 September to understand the initial impact of Strong Customer Authentication (SCA) on merchants and shoppers. Its findings offer good news: merchants have not seen an increase in abandoned transactions or declined payments.
SCA legislation came into force at the weekend across Europe and aims to tackle growing rates of fraud and cybercrime. It requires that all EEA transactions go through a two-factor authentication process, unless they qualify for an exemption*. One consequence of this change is that the authentication process will introduce a degree of friction to the shopper journey, which may result in an increase in cart abandonment, and ultimately in lost revenue for retailers. Banks across Europe are expected to ramp up the volume of consumer authentication requests over the coming months.
To help merchants prepare for the changes required by SCA, Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, has launched Barclaycard Transact, which went live over the weekend.
The dynamic fraud protection solution enables businesses to benefit from SCA exemptions: trusted, low-risk transactions will continue to flow seamlessly, bypassing the two-factor authentication process mandated by SCA. In turn, payment acceptance rates are improved, resulting in fewer declined transactions and ensuring a smooth experience for shoppers. Higher-risk transactions requiring further inspection will still go through two-factor authentication, in accordance with the regulation.
Paul Adams, Director of Acquiring at Barclaycard Payment Solutions, said: “Our data offers encouraging news for merchants, whose transaction volumes have been, so far, unaffected by the go-live of SCA. Barclaycard’s unique position as issuer and an acquirer means that we understand the concerns that both merchants and consumers have about SCA, and the balance the regulation necessitates between customer experience and security.”
“We have designed Transact to help our customers get the most out of the incoming regulation, by enabling them to provide a smooth payment experience for their shoppers, while at the same time reducing risk and managing fraud.”