Finance Monthly August 2019 Edition

Such a system, relying on a vast amount of transaction data, provides the right degree of scrutiny for each order to protect consumers and retailers from fraudulent credit card transactions while avoiding the added friction brought on by a one-size-fits- all, legacy 3D-Secure-powered system. The holistic approach allows for nearly instantaneous SCA review and more accurate decisions based on the significantly more data processed by the system’s learning machines, as opposed to passing down that data all the way to the issuing banks and back. The system should have the added advantage of shifting all liability away from the merchant, onto the issuing bank in the case of 3D-Secure-authorised transactions, or onto the SCA provider for any transaction that would require a step-up or be declined. While the details of this innovative approach to PSD2 are important, it’s the underlying approach that is vital to executing a successful PSD2 strategy. It starts with embracing the new SCA requirements rather than trying to avoid them through a pretzel of exemptions. E-tailers who are planning to bank on exemptions to PSD2 will fail miserably as said exemptions are only sometimes applicable to small value baskets, and are ultimately dependent on the acquiring and issuing banks’ low fraud rates. And retailers can’t control either of these factors. Embracing PSD2 gives back control to retailers, giving them a real opportunity to build a competitive advantage. When e-tailers take a proactive approach to the directive, it’s possible for them to implement a robust system which meets the aims of PSD2 whilst also maintaining the online customer experience. The future belongs to e-retailers who have the ingenuity and foresight to treat PSD2 as an opportunity, not as the elephant in the room. 48% of consumers felt frustrated by checkout experiences that redirect them to another site for credit card verification, a feature of 3D Secure 28% of consumers abandoned their carts because checkout took too long or was too complex Source: Survata Source: The Baymard Institute www.signifyd.com 21 www.finance-monthly.com FINANCE & BUSINESS - PSD2