Evaluating potential of PSD2 and SCA – 5 tips for success

25th November, 2020 

Ekata has identified five markers of success that could also help entities unlock the potential of PSD2 SCA, be it for a provider or a merchant.

In its latest study, the company asserted that the “security enhancements provisioned under PSD2, such as SCA, quickly become more than a legal protection checkbox – they are a matter of vital strategic importance to the bottom line of any organization”.

The markers that also differentiate leaders from the rest of the pack are:

  1. Consistent and clear communication
  1. Identify priorities for merchants: It is paramount that PSPs and acquirers alike understand the pressure that merchants are under in this climate. Merchants must be made aware of the minimum actions needed to take to ensure SCA can be applied and out-of-scope transitions with a lot of nuances, most notably MITs, so that they can submit with the right flags to ensure they do not get declined. Also, help them with more sophisticated transaction rescreening take full advantage of the acquirer TRA exemption.
  1. Build tools and recognise data importance: The better the TRA models that PSPs are able to implement, the better exemption rates their merchants may be able to get.
  1. Understand issuer behavior: Given a central feature of 3DS2 is the ability for merchants to share more data with issuers, this allows issuers to make more informed authentication decisions. Ekata highlighted that the issuer behaviour varies depending on size and geographical location. They also appreciate that issuer response will change over time as operations are refined in the lead up to SCA implementation. Understanding issuers’ overall risk thresholds and their associated behaviours is a reliable way to stand out and stay ahead.
  1. Pay attention to the little guys: Given the top 20 merchants in Europe have less than 20% of the eCommerce market, the small and medium merchants are where acquirers and PSPs should be focusing their attention.

The study featured over 36 PSPs and acquirers who represent over 60% of European card-not-present (CNP) volume.

By Ai Team