Barclaycard finds that SCA has had no initial impact on transactions

Barclaycard finds that SCA has had no initial impact on transactions

Early transaction data from Barclaycard following the introduction of Strong Customer Authentication (SCA) rules finds that merchants have not seen an increase in abandoned transactions or declined payments, contrary to popular expectations.

E-commerce businesses have been warning for months that more than a quarter of payments would fail under the new regime - which demands a two-step verification process for all online purchases over EUR30.

However, transactions deemed low risk by the merchant's acquirer using transaction risk analysis data qualify for an exemption - a factor which has been seized on by Barclaycard with the introduction last weekend of a new dynamic fraud prevention system, Barclaycard Transact.

Analysis from Barclaycard of transaction data from 14 and 15 September, the first two days following the EU deadline, shows that the SCA rollout has had no initial impact on sales.

Paul Adams, director of acquiring at Barclaycard Payment Solutions, says: “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.”

National regulators have been given additional leeway by the European Banking Authority to extend the September deadline for the introduction of the new rules in order to give firms more time to prepare.

UK Finance, acting on behalf of the Bank of England, has already drawn up an alternative timetable for the transition, recommending a minimum 18-month delay to the introduction of SCA rules in the UK, with a further one-year extension for the hospitality and travel sector.

Other European member states are also looking to revise their own compliance deadlines, but in the absence of a harmonised pan-European timetable, country-specific exceptions have the potential to cause quite a lot of confusion. For merchants operating in more than one country, things get complicated, because they could be subject to multiple overlapping deadlines.

To minimise any complexity, Barclaycard is strongly recommending that merchants should immediately begin to work with their payment acquirer to prepare for compliance.

Comments: (6)

A Finextra member
A Finextra member 18 September, 2019, 12:401 like 1 like

No impact? Strange... I thought that PSD2 and 3D-Secure v2 were intended to boost conversion rates.

Eli Talmor
Eli Talmor - SentryCom Ltd. and IBC Foundation - Haifa 18 September, 2019, 13:031 like 1 like

"However, transactions deemed low risk by the merchant's acquirer using transaction risk analysis data qualify for an exemption - a factor which has been seized on by Barclaycard with the introduction last weekend of a new dynamic fraud prevention system, Barclaycard Transact."

If all transactions are under 30 euro - then OK . If not - the above statement is misleading , at least.

Stijn Van Brussel
Stijn Van Brussel - PingPong Financial - Luxembourg 18 September, 2019, 13:13Be the first to give this comment the thumbs up 0 likes

The Transaction Risk Analysis exemption is not limited to a specific maximum amount. The LVP exemption for remote (i.e. online) payments below 30 euros is a different exemption.

Eli Talmor
Eli Talmor - SentryCom Ltd. and IBC Foundation - Haifa 18 September, 2019, 13:50Be the first to give this comment the thumbs up 0 likes

But if Barclaycard transactions are low-risk to begin with - then surely they do not need to apply SCA  and they customers do not feel the "pain" of SCA. What are the "news" then , if you are exempt ? 

The question remains: did anybody applied SCA after Sept. 14 and what was the impact !

Dinesh Katyal
Dinesh Katyal - Financial Data Exchange - San Francisco Bay Area 18 September, 2019, 20:24Be the first to give this comment the thumbs up 0 likes It would be nice to get a breakdown of the impact by the risk tiers and the types of SCA employed. That would be super useful in informing the future direction for the payments UX.
A Finextra member
A Finextra member 18 September, 2019, 21:42Be the first to give this comment the thumbs up 0 likes

No impact, obviously, since almost all member states in the EU including UK have allowed the issuers and acquirers to postpone the SCA rules implementation.

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