Goode Intelligence recently published a white paper aimed at fraud and security professionals that are responsible for the roll-out and management of PSD SCA solutions.
The white paper, “Beyond Compliance: Comply and Thrive in a PSD2 World”, investigates how behavioural biometrics can enhance Strong Customer Authentication (SCA) deployments and resolve issues that have become apparent now that SCA is mandatory across the UK and the EU.
It is aimed at banks and Payments Service Providers (PSPs) that are now SCA compliant who want to discover what is next now that they are SCA compliant.
SCA adoption is high
The payments industry is at the start of its journey with implementing SCA and has rightly focused on being compliant with local SCA regulation. The percentage of transactions processed through SCA-compliant authentication rails is high in Europe with 92 percent of authentication requests being SCA compliant.
SCA has reduced payment fraud
SCA was introduced to reduce payment fraud within Europe and there are indications that this has been the case. Fraud rates are declining in regions that have implemented SCA. The EBA has confirmed that the average value of fraudulent card transactions across the EU has fallen by 50 percent for issuers between June 2020 and April 2021 (0.12 percent to 0.06 percent).
Fraud rates down – at what cost?
This is incredibly positive news but there have been documented issues with the deployment of SCA technologies that include an increase in transaction failure rates (payment attrition), rejected transactions and abandonment in the payment process because of increased friction for consumers. Figures from Microsoft paint a picture of low SCA success rates, and high challenge and abandonment rates.
Beyond compliance: comply and thrive in a PSD2 world
With good levels of SCA compliance and falling payment fraud levels, it is time for the payment industry to concentrate their efforts onto the problem areas that SCA is causing. These include measures that can:
- Increase acceptance rates
- Reduce declines and failures
- Reduce levels of friction
- Make it easier for consumers to make payments online
- Detect previously undetected fraud
Benefits of behavioural biometrics for SCA
A technology that can meet these requirements, and one that is being increasingly adopted, is behavioural biometrics. Banks and payment services providers are increasingly turning to biometrics for payment security with many issuers already adopting biometric authentication in their mobile apps. A leading UK bank, that has turned to BioCatch’s leading behavioural biometric technology to enhance its SCA solution has a projected fraud saving of £1million annually. The BioCatch behavioural biometric solution deployed by this UK bank was able to detect 42 percent of the fraud that was being missed prior to the deployment of BioCatch’s technology.
Behavioural biometrics, has many benefits for payment security including:
- Meets SCA ‘inherence’ factor requirements
- Including providing ‘inherence’ for ‘what you have’ SCA factor, e.g., mobile phone evidenced by OTP
- Improves user experience
- Reduces friction leading to reduced abandonments
- Reduces false positives for 3DS and risk-based-authentication (RBA) transactions
- Reduces fraud, including previously undetected fraud
Download the full report
You can download the full report here.
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