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Digital Identity, Security & Online Fraud

SCA in Europe might cause EUR 57 billion loss in economic activity - study

Thursday 6 June 2019 | 07:50 AM CET

Europe’s online economy risks losing EUR 57 billion as Strong Customer Authentication (SCA) is enforced, according to a study conducted by 451 Research.

Moreover, the research forecasts that only one in two businesses will be compliant before September 2019. Additional findings reveal that SCA will disproportionately impact small businesses: three in five businesses with under 100 employees are either unfamiliar with SCA, therefore missing the September deadline, or are unsure when they will be ready. However, for larger merchants of more than 5,000 employees, only 1 in 25 payment professionals are unaware.

Most businesses are now racing against the clock to become compliant, with 44% expecting to be ready only on the exact day SCA takes effect (September 14).

Many businesses are preparing to minimise the transactions for which SCA will be required. However, businesses are dramatically underestimating the complexity and resource burden of managing and optimising these exemptions. Half of respondents plan to handle management of exemptions completely in-house. The challenge is that exemptions are complex to administer, especially for smaller businesses, and require visibility on how card networks and banks will apply exemptions across Europe.

At the moment, 47% of European consumers feel that the online checkout process is ‘very easy’ and the most attractive customers for online businesses often abandon purchases when encountering a poor checkout experience. Still, businesses feel that starting with September 2019, SCA will exacerbate low consumer tolerance for bad checkouts, causing a rise in cart abandonment.

The findings are based on surveys conducted with 500 qualified payment professionals at online businesses and 1000 consumers in the UK, France, Germany, the Netherlands and Spain.

More: Link
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