Data from Barclaycard Payments, which handles £1 in every £3 spent on credit and debit cards in the United Kingdom, reveals that many online businesses are still “not fully compliant with the new Strong Customer Authentication (SCA) regulation – which became mandatory for all transactions one month ago today – and have lost out on £130 million worth of sales as a result.”
In the biggest change to payments regulation since the roll out of Chip & Pin in 2006, all online transactions over £25 “are now subject to SCA checks to help combat the £376m of online fraud committed in the UK each year.”
SCA adds a security check to all qualifying online transactions, “prompting the cardholder to verify their identity through a one-time passcode sent by SMS, a response code generated from a bank-issued card reader or through approval via their mobile banking app.”
Cardholders then enter this code “into the business’ SCA compliant checkout to complete the purchase.”
These checks have led to “a vast number of transactions being declined as many businesses have not sufficiently prepared themselves for the new regulation, with retailers missing out on millions of pounds in sales each day.”
Barclaycard Payments data shows that “over 22,000 transactions a day, worth £4.3m, have been declined in the month since SCA became mandatory.”
New research by Barclaycard Payments, “demonstrates the importance of using sophisticated payments processing technology to improve customer experience.”
The data shows two in five online businesses (37%) have “not introduced any new payments technology on their website over the past two years.”
However, of those that have, 92% “agree that the technology they invested in has improved the checkout experience for their customers – one example being technology that can help reduce the number of SCA-related declines, with other benefits including in-depth analysis of where and when basket abandonment takes place.”
Businesses can comply with SCA without adding additional layers of friction to the checkout by “deploying solutions such as Barclaycard Transact, which leverages an exemption in the regulation owing to its highly sophisticated fraud checks.”
The payments tech, which can be added to existing payment gateways, “enables e-tailers to reduce the risk of abandoned baskets, while also keeping consumers secure when shopping online.”
As noted in a blog post, Barclaycard Payments transaction data “shows that over the past month, 93% of transactions processed through the Barclaycard Transact platform were approved on the first attempt, compared to just 49 % of transactions going through less secure, non-SCA compliant channels.”
The solution, developed with customer security and experience at its core, “allows online businesses to provide a simpler and quicker checkout process, which in turn is likely to increase consumer loyalty and boost sales.”
Rob Cameron, CEO of Barclaycard Payments, said:
“One month on from the introduction of mandatory SCA checks, it’s clear that too many businesses are still not compliant and are losing out on millions of pounds in sales as a result. Our research shows that adopting new payments technologies can help businesses reduce basket abandonment while offering customers a faster, more secure check-out experience.
The message to retailers “is clear; prioritize SCA compliance, simplify the customer journey and take advantage of the latest payments technologies to avoid losing out on sales and customers.”
To help its hundreds of thousands of merchants comply with the new regulations, Barclaycard Payments has been “hosting regular webinars on SCA, focusing on the steps businesses can take to protect their online revenue streams.”
Barclaycard, part of Barclays Bank PLC, is a global payment business that “helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit.”
The firm partners with “a wide range of organizations across the globe to offer their customers or members payment options and credit.”