Online retailers are being warned to be prepared for the introduction of Strong Customer Authentication (SCA), the biggest change to payments since Chip & Pin rolled out 16 years ago.
Initially scheduled for introduction on 14 September 2019, the rules - which demand a two-step verification process for all online purchases over €30 - come into effect today.
The FCA promoted early enforcement by issuers throughout February, which resulted in as much as 75% of payment traffic receiving a soft decline and being sent to 3DS (3d-Secure) for further authentication checks.
Barclaycard Payments, which processes £1 in every £3 spent on credit and debit cards in the UK, shows that merchants risked losing out on £102m worth of sales in February.
According to Barclays data, 43,000 transactions a day, worth £3.64m were declined at the point of sale in February.
The data shows, that last month, one percent of shoppers noticed an increase in their online payments being declined. Additionally, 37% headed to another retailer to complete their purchase, while the same proportion said they’re unlikely to shop with a merchant in future if their payment gets rejected without explanation.
According to Adyen just 44% of businesses are prepared for the new rules.
Rob Cameron, CEO of Barclaycard Payments, comments: “Merchants who aren’t yet ready should start to prioritise becoming compliant to avoid losing out on sales. Our data has already shown the impact of not being prepared, and this will only get worse if steps are not taken now. The message to retailers is clear; if you don’t make buying online quick and easy for your customers they will simply go elsewhere.”
Nick Raper, director of Nuapay, believes that a shift to open banking payments will provide a way out of the mire for consumers and online merchants: "The industry needs to stop talking about security and look to options already available such as open banking payments to ensure that the consumer impact is minimised and merchants are given the tools they need to remain compliant.”