People who are in the ecommerce business want to provide the best payment experience possible to their online customers to in order to avoid card abandonment and improve sales conversion. Merchants want to keep full control of the checkout user experience. Under PSD2, all online transactions should require Strong Customer Authentication before the transaction can be approved, but there are some low risk and low-value transactions that may be exempted from SCA. With 3DS2 protocol which fulfills Strong Customer Authentication requirements, the authentication is commonly performed by the issuers which are creating few challenges.
In order to perform authentication during check out, cardholders are switching from the merchant domain to the issuer domain and backward, something that creates unnecessary friction especially if the cardholder isn’t familiar with this experience. Also, the merchant does not have control over the issuer’s authentication method and often could provide a better authentication user experience themselves using, for instance, device biometrics or merchant log in together with behavioral biometrics. These solutions which are easier to provide for merchants who have more data available.
Fortunately, PSD2 allows to delegate authentication to third parties including merchants(and wallets) so as to offer a smooth consumer experience while being compliant. This allows consumers to stay all the way within the merchant environment’s website or app.
In order to benefit from delegated authentication merchants have twopossibilities. One is setting up bilateral contracts between the merchant authenticator and the issuers, something that can quickly bring complexity in the contract management because of the high number of issuers to be contracted in Europe. The other option is to sign up with VISA delegated authentication program that provides legal multilateral agreementsframework. This delegated authentication program meets PSD2 requirements and removes the need for bilateral agreements.
For more information on VISA delegatedauthentication program , visit our websiteat https://loginid.io/
