A Cocoon of Security and Convenience

Can you improve sales, reduce fraud and enhance customer experience? Changing the mindset from compromise to embracing a better way of doing things.

There has been much focus over the last few months over approval rates. The final Go Live Date for PSD2 at the end of December 2020 came to pass, followed by a further transitional period where soft declines were introduced slowly up to the end of April. Going forward SCA is now the new standard for the EU. 

Across the world the card schemes have also been promoting the use of 3DSecure and irrespective of PSD2, migration to Version 2 is mandated with October as a target date set by some schemes.

The good news is that 3DSecure Version 2 is working very well for browser integrations;  direct migrations from Version 1 with only a minimum of additional effort over and above the implementation of the protocol are performing very well with friction-less authentication kicking in at around 40%. These migrations barely scratch the surface when it comes to the potential of EMVCo 3DS but they provide a strong foundation upon which to build and improve.

We have worked with many merchants over the last few months and learned a lot about their business models and challenges. Merchants have seen the rejection rates spike especially as April came to an end and the stragglers in adopting SCA have been jolted into action.

What did we learn from our interaction with merchants ? Clearly 3DS Secure cannot be applied all the time and the SCA flow does not always work well with some business models.

This is why EMVCo 3DS Version 2 protocol has been created and why we are migrating from 3DSecure Version 1. Version 2 is specifically designed to cater for the difficult situations. Trying to ignore 3DS or bypassing 3DS is a fundamental misunderstanding of the new payment paradigm or what the SCA mandate is all about and its really no longer an option.

If it was possible to just simply ignore SCA, the whole construct would fall apart. Fraudsters would continue to process stolen cards without 3DS, merchants will accept losses and lost business as simply an operational cost and the whole rickety structure which came into existence to service eCommerce will continue as is.

So what are the challenges for Merchants ?

Here is what had merchants worried …

Customer Experience: This is why we have friction-less authentication. 3DS will work transparently in the vast majority of cases and a challenge will only be created when necessary. Already, without any effort, friction-less is working very well. Merchants can share more information to help the models on which Risk Based Analysis is based achieve even greater smart, no challenge authentication. Customers are also re-assured when challenges are generated at the appropriate times – it shows that the merchant is not just concerned with taking the money but actually cares about the safety of the card holder and is worthy of their trust. 95% friction-less rates are possible and will be achieved as the ecosystem learns how to leverage SCA to its best.

Timing Issues: Ticket Sales or bookings often require that an item, seat or room is held while the payment is completed, but the item cannot be held up for any appreciable length of time. Under normal circumstances 3DS is completed very quickly and the growing use of push notification is ensuring that notifications work promptly and in real time. On the merchant side, a number of strategies can be implemented such as showing the remaining time to the cardholder with the option to cancel the authentication request, use of time-limited out of band authentication, increase in friction-less  authentication and merchant initiated transactions. A greater level of sophistication is required on the merchant side, but  the tools are in place.

Recurring and Merchant Initiated: These are an integral part of 3DS V2 and Endeavour has done an outstanding job in enabling its clients to use these tools effectively.

Low Value and Corporate Payments: These are catered for within 3DS V2 and can be used even, in the case of Low Value payments, with no extra effort. Some markets may be required to upgrade their procedures with regards to Corporate or Logged Cards to ensure that convenience is matched with security.

Exemptions: Think 3DS is not applicable ? Use exemptions. Exemptions let the other parties know that a payment actually qualifies for exemption and SCA is not omitted on a whim.

3DS is driving up approval rates, increasing customer security and satisfaction and building the next generation of eCommerce applications on a solid foundation. And most important of all, the customer experience stays at the forefront of all these changes.

Your customer journey

By working with an expert 3DS provider such as Endeavour excellent results are achieved. Endeavour 3DS is your integration portal into a dynamic and adaptive ecosystem which takes data from all the points touched by a transaction such as the customer’s user profile and purchasing history, the merchant and the contextual indicators to create an adaptive cocoon of convenience. 

Endeavour 3DS allows large merchants and payment providers to offer this flexibility to their customers. By using Endeavour 3DS in your checkout experience, you can create scenarios that reduce friction and increase approval rates for your particular business case. This boosts the bottom-line of any online merchant when it is made to fit. To discuss how you too can benefit contact us via https://www.threedsecurempi.com or on info@3dsecurempi.com.