Retailers risk losing over £100m ahead of SCA regulation
A new in-depth study by Barclaycard Payments exploring readiness for SCA showed that 100% of transactions fall into scope for the new regulation, meaning ‘merchants who remain non compliant could see a significant fall in revenue’
Barclaycard Payments has revealed that merchants risked losing out on £102m worth of sales in February, as two-factor authentication checks ramped up for online purchases ahead of Strong Customer Authentication (SCA) regulation becoming mandatory on 14 March.
A new in-depth study by Barclaycard Payments exploring readiness for SCA showed that 100% of transactions fall into scope for the new regulation, meaning “merchants who remain non-compliant could see a significant fall in revenue”.
The data shows that last month 14% of shoppers noticed an increase in their online payments being declined. Additionally, 37% headed to another retailer to complete their purchase, while the same proportion said they’re unlikely to shop with a merchant in future if their payment gets rejected without explanation.
The number of transactions subject to SCA checks has been gradually ramping up, this led to Barclaycard Payments seeing 43,000 transactions a day, worth £3.64m declined at the point of sale in February.
SCA, applying to online and app-based transactions, is designed to help combat the £376m of online fraud committed in the UK each year. It requires all merchants to ask cardholders to verify their identity through a one-time passcode, provided by the card issuer.
Rob Cameron, CEO of Barclaycard Payments, said: “The introduction of mandatory SCA is the most significant payment milestone since the rollout of Chip and Pin more than 16 years ago.”
“While the new regulation is a positive step to keep customers’ data safe online, our research shows that shoppers are inclined to abandon transactions if it takes too long to check-out, demonstrating how important it is for businesses to have sophisticated fraud checks in place.
He added: “Merchants who aren’t yet ready should start to prioritise becoming compliant to avoid losing out on sales. Our data has already shown the impact of not being prepared, and this will only get worse if steps are not taken now. The message to retailers is clear; if you don’t make buying online quick and easy for your customers they will simply go elsewhere.”
