The PSD2 regulation enables issuers to ‘delegate authority’ for authentication to a third-party (such as a merchant or wallet provider). The Visa Delegated Authentication program allows clients as well as third-parties toallow Visa to manage this delegation process. Merchants should be eligible to participate in Visa Delegated Authentication program rules. Minimum requirements will require a Visa Merchant Id provisioned by Visa to be able to participate.
With delegated authentication, you will be able to take control of your checkout experience. Since PSD2 SCA enforcement, some online merchants have implemented 3D Secure while others are already looking to the future at improving their customer check-out experience, considering solutions like delegated authentication, obviously for very good reasons. In Ecommerce, merchants need to be able to provide the best payment experience possible to their online customers in order to avoid card abandonment and improve sales conversion.
If you are a merchant, you want to keep full control of the checkout user experience. Under PSD2, all online transactions need Strong Customer Authentication before the transaction can be approved, even though there are some low risk and low-value transactions that may be exempted from SCA. With 3DS2 protocol which fulfills SCA requirements, the authentication process is commonly performed by the issuers which are creating few challenges.
To be able to perform authentication during check out, cardholders are switched from the merchant domain to the issuer domain and backward, something that ends up creating 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 are easier to provide for merchants who have more data available.
For more information on the visa delegatedauthentication program, visit our website at https://loginid.io/
