The NOW Factor: Why You Should Implement 3DS2 Today
Posted 25 November 2021, UK
When it comes to eCommerce in the UK, one of the hot topics of the moment is ensuring payment transactions remain compliant with Strong Customer Authentication (SCA)1 under the Payment Service Directive No.2 (PSD2) by March 14, 2022. With the deadline being just a few months away, can merchants really afford to wait until March before implementing 3DS2?
The answer is no and here are the reasons why.
Three Key Reasons Merchants Should Act Now
The reality is that the ramp-up programme is impacting transactions today and merchants who fail to act face significant potential pitfalls.
Reason 1 – Significant Increases in Soft Declines
The data available for transactions among ADVAM customers show that merchants who are yet to implement 3DS2 are seeing a sharp increase in the number of declined transactions due to the lack of a PSD2 authorisation code.
With one merchant we have seen the volume of declined transactions shift from 2% of all attempted transactions in early September 2021, to 8% of all transactions in October 2021. This represents an increase of over 400% in the number of transactions that the merchant is seeing decline.
Reason 2 – Consumers Are Losing Patience
With more transactions being declined the data implies a trend among consumers – they expect a frictionless checkout experience and the number of times they are willing to re-attempt a transaction is in decline.
Exploring the transaction data available we have seen that consumers are willing to retry a transaction less. The typical number of attempted transactions has dropped by 16% since the beginning of September.
Reason 3 – Declined Transactions are Impacting More of Your Customers
Not only is the total number of declined transactions increasing, and customer acceptance of any obstacle to checkout waning, but the number of customers that are being impacted by declined transactions because of the ramp-up is also rocketing.
Comparing data from the start of September to mid-October 2021 one merchant has seen the number of unique card numbers impacted by a lack of a PSD2 authorisation code increase by 493%.
Your Next Steps
If you recognise any of the patterns mentioned in this article in your transaction data, you should implement 3DS2 as soon as possible.
In many cases implementing 3DS2 is a relatively straightforward process, and as well as protecting revenue and maintaining customer satisfaction, can also aid fraud prevention.
ADVAM has been helping our customers enable 3DS2 for their eCommerce websites. If you need help implementing an SCA compliant solution before the March 2022 deadline, contact our team today.
1What is Strong Customer Authentication (SCA)
SCA is a new requirement for additional layers of security in electronic payments. Merchants now need to ask consumers to provide additional information to prove their identity when making an electronic payment which includes:
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