The application of PSD2 Strong Customer Authentication (SCA) standards across the EuropeanUnion in 2021 brought some growing pains with it for issuers, merchants, acquirers, and customers. It notably added friction in the payment process. But the visa delegated authentication program is making leaps and bounds as an alternative to the traditional long-winded authentication processes. Due to the growing trust between merchants and issuers, it means that there is a shift in previously rigid authentication processes, something that has led to faster checkout and less friction for customers.
The revised Payment Service Directive (PSD2) entered into effect in the year 2016with the aim of strengthening the European online payment network as well as encouraging competition among PSPs. As a result, SCA standards became applicable, who goal was to reduce fraudulent online transactions. These became binding for most European countries in 2021, something that caused payment players to scramble to put stronger authentication measures into place, which were usually accompanied by migrating to EMV 3-D Secure protocols.
But these additional security measures have been found to also cause friction in the payment process by adding extra steps for the customer. First, the customer is supposed to enroll in SCA and then perform strong customer authentication. Keep on mind that every extra step is a step where you might lose the customer on the journey. Customers don’t always understand this extra measure, which can cause them to abandon the purchase as well as a lower rate of successful transactions.
To balance added security and optimum customer experience, you can enter delegated authentication. Unlike the traditional payment flow where authentication is carried out by the issuer, with delegated authentication, the merchant can directly authenticate the customer, skipping the redirection to the issuer and facilitating the ‘one-click purchase’ experience.
For more information on the visa delegatedauthentication program, visit our website at https://loginid.io/
