Published: March 3, 2020
Reading time: 2 minute read
Written by: Kayla Parker

With the delayed September 2019 deadline for PSD2 now six months behind us and the new March 2021 PSD2 deadline approaching, merchants must ensure they’re preparing for the enforcement of SCA (Strong Customer Authentication) now, ahead of the upcoming enforcement date.

SCA outlines the process for verifying online transactions, in order to better protect consumer data and reduce Card Not Present fraud. The new rules require customers to authenticate their identities using any two of the following three methods:

  • Knowledge – Something only the unique user would know (e.g. password)
  • Possession – Something to which only the user has access (e.g. mobile phone)
  • Inherence – Something the user “is” (e.g. fingerprint)

Implementing SCA will help merchants better authenticate their transactions. However, it can also inherently add additional friction to the checkout process and degrade the overall experience consumers have on their site.

Under PSD2, certain transactions are exempt or excluded from undergoing SCA, and these exemptions can be requested to avoid unnecessary friction for certain consumers. Ensuring that SCA is triggered only when absolutely necessary can drastically improve customer experience and help merchants comply with PSD2 without reducing their conversion rates.   

We sat down with Forter GM of EMEA Aaron Begner to discuss how merchants should prepare for enforcement of SCA and what impact it will have on e-commerce in the months and years to come. 

Begner mentions that there will be three primary impacts of this added friction: 

  • Lost revenue, because more transactions that otherwise should have been approved will be declined under SCA. 
  • A higher rate of cart abandonment, as consumers become frustrated with the new, unfamiliar friction being introduced to the checkout process. 
  • An overall negative impact to customer experience and perception of the merchant’s brand. 

What does Forter recommend that merchants do and how should they be preparing for SCA? Begner urges merchants should prepare their businesses to be compliant now, even though we still do not know the exact date that SCA will go into effect.

He further recommends that merchants should take advantage of this time to optimize and streamline their authentication process. With 26% of users stating that they would completely abandon a purchase if the checkout process took too long, businesses that understand how to maintain PSD2 compliance with the least possible friction will gain a huge advantage. 

Forter’s Adaptive Authentication capabilities allow merchants to assess the trustworthiness and risk associated with each transaction in real-time and dynamically route customers to the path of least friction possible – taking advantage of any exclusions or exemptions when relevant. This ensures a better overall experience for customers, resulting in lower rates of cart abandonment and higher approval rates for the merchant. 

Furthermore, while fraud in the post SCA world will inevitably look different from how it looks today, fraudsters are showing no signs of slowing and they will continue to launch their attacks whether merchants are compliant or not. Therefore, merchants should seek a fraud prevention partner that can both protect their business from fraud and abuse, and help them streamline SCA so that they can maintain full PSD2 compliance without adding unnecessary friction to the customer journey. 

Watch the full video above or head to to learn more!

2 minute read