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Microsoft tests show SCA leads to checkout abandonment

Microsoft tests show SCA leads to checkout abandonment

Strong Customer Authentication (SCA) testing by Microsoft shows that customers are abandoning their purchases at high rates when challenged at the checkout.

Slated to come into force at the end of the year, the SCA rule demands a two-step verification process for all European online purchases over EUR30, meaning customers will need two of the following: something they know (like a password), are (fingerprint/face ID), or have (phone).

Microsoft has been testing SCA for nearly a year, sending a small, random percentage of customer initiated transactions for authentication over EMV 3D-Secure.

In a LinkedIn post on the results, Dean Jordaan, director, e-commerce and payments, Microsoft, has offered up some observations that cast doubt on the readiness of the industry and consumers to enter the SCA era.

Jordaan notes that challenge success rates are "low to very low", meaning that merchants lose out on sales and customers miss out on their purchases.

When challenged customers abandon the checkout at high rates. "This suggests customers are confused, don't like the authentication method, and/or encounter poor implementations of SCA," says Jordaan.

And even if a challenge is successful, it takes a long time, especially for an app.

Despite industry calls to reassess in light of the Covid-19 crisis, the EC recently confirmed that it will not follow the UK's lead and extend the SCA deadline from 31 December this year.

The refusal to delay, adding complexity at the checkout, could cost merchants up to EUR90 billion in lost sales for 2021 alone, claims payments consultancy CMSPI.

Comments: (4)

Nick Ogden
Nick Ogden - RTGS.global - London 10 August, 2020, 09:091 like 1 like

And of course this happened when 3D secure was originally introduced. We need a better solution, and industry collaboration on adoption, before its introduced? 

Marten Nelson
Marten Nelson - M10 - San Francisco 11 August, 2020, 02:05Be the first to give this comment the thumbs up 0 likes Thanks, Captain Obvious!
Colin Piri
Colin Piri - IDT Financial Services Limited - Gibraltar 11 August, 2020, 07:59Be the first to give this comment the thumbs up 0 likes

This is a rushed solution devised mainly by technocrats how have little real life experience in payments

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 August, 2020, 13:35Be the first to give this comment the thumbs up 0 likes

@Colin Piri : In case you're stating an opinion, I can corroborate that it's a fact. The head of the committee that mandated 2FA for online payments was rumored to have gotten the plum post because he was a professor in a prestigious university. He had only ever shopped in the five stores located in the tiny shopping complex inside his university campus and had always paid with cash.