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Fragmented implementation of PSD2 SCA across Europe adds complexity for merchants

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PSD2 SCA implementation chaos across Europe is likely to cause merchants selling across the EU a range or problems and could open up new security risks, according to Adyen, a payments platform of choice for many of the world’s leading companies.

The SCA legislation, implemented under the European Union’s Payment Service Directive (PSD2) required merchants to offer SCA for online transactions to help protect customers against fraud. The legislation was originally slated for 14 September, but the UK and several other nations have announced implementation delays. The timelines and milestones for implementation are not fixed and vary from country to country.

However, merchants selling goods to customers in the countries that have not delayed implementation of SCA will need to comply with the legislation for transactions from those countries.

Analysis of Adyen’s platform data has revealed that no UK bank has mandated SCA under the regulation as of the 16th September increasing the complexity for UK retailers to meet the SCA regulations with compliant countries.

Research commissioned earlier this year by Adyen, found that more than half of retailers (57%) reported an increase in the level of fraudulent transactions compared to the same time last year. It also found that just one in five (22%) retailers were ready for new payment regulations that were supposed to take effect this month.

Myles Dawson, UK Managing Director of Adyen explains: “The intention for the delayed implementation was to simplify the equation for businesses, but the reality is far from simple for anyone selling across borders. Now, they must examine the origin of each transaction and determine if it is a country that is enforcing SCA. If the transaction originated in one of these countries and they cannot comply with SCA, they will have to decline the transaction. That means lost sales. The only way forward for retailers is to become SCA ready and to have a dynamic authentication system that can automatically determine the SCA requirements of each transaction. They will also need to be monitored regularly, as the implementation date varies between different countries.”

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Paul Skeldon

Editor and content creator for Telemedia – for 18 years and counting

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