Online retailers who are not set up for Strong Customer Authentication (SCA) risk losing £3.64m every day as the two-factor authentication becomes mandatory today, Monday 14 March.
Data from Barclaycard Payments shows that online retailers who are not fully compliant with SCA have already been losing out on significant amounts of revenue, as the number of transactions subject to SCA and two-factor authentication increases.
Some 43,000 transactions a day were declined at the point of sale last month – worth £3.64m each day, or £102m in total.
Introduced and regulated by the Financial Conduct Authority (FCA), SCA regulation requires online shoppers to verify themselves at the checkout by entering a one-time passcode in addition to their card details. The two-factor authentication criteria applies to 100% of the millions of online and app-based transactions made every day.
The move – which has been designed to reduce the £376m lost to online fraud in 2020 – is the biggest change to payment systems since Chip & Pin first rolled out 16 years ago.
Barclaycard’s data also reveals that 14% of shoppers noticed an increase in their online payments being declined. More than a third (37%) headed to another retailer to complete their purchase, while the same proportion said they’re unlikely to return to an ecommerce site if their payment is rejected without explanation.
Three out of every ten shoppers simply abandoned their baskets, saying it took too long to check out.
“The introduction of mandatory SCA is the most significant payments milestone since the rollout of chip and pin more than 16 years ago,” said Barclaycard Payments’ CEO Rob Cameron.
While the new regulation is a positive step to keep customers’ data safe online, Barclaycard’s 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”.
“Merchants who aren’t yet ready should start to prioritise becoming compliant to avoid losing out on sales,” Cameron added.
“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.”
To find out more about how Barclaycard Payments can help your business to prepare for SCA, visit https://www.barclaycard.co.uk/business/business-matters/fraud-and-security