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How Checkout.com helps merchants optimize their SCA strategy

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Strong Customer Authentication (SCA) is now mandated across all of Europe and businesses have had to make changes to make sure they are compliant. There is the opportunity to go a step further, though. Businesses can take SCA from a box-ticking exercise in compliance to part of a strategy that crafts a competitive advantage. 

The question for businesses should not be ‘if’ but ‘how’. In other words, how to apply SCA protocols so that fraudsters are kept at bay and customers are protected without too much interruption to their shopping experience. The answer is partly technological (in the form of 3DS2 protocols); partly data-driven (knowing enough about the customer and their transaction); and partly strategic (knowing when it makes sense not to apply SCA and so avoid unnecessary friction in the customer journey). 

“Merchants now understand that they need a mature 3DS2 solution, and so are becoming more curious about it.”

Maxime Colas, Senior Manager, Checkout.com


Checkout.com partners with businesses to help them work through these considerations, and optimize their SCA strategy. So what does this look like?

1. Strategic advice: 

Every business is unique and must have a bespoke approach to SCA. Our first job is to educate ourselves about your business and to educate you about SCA. It’s also important that merchants understand not only the range of exemptions they could apply but also which ones make sense for their particular business needs.

Ultimately, this is all about finding the balance between your customer’s security, their convenience and your own liability. Your ‘sweet spot’ will be different from other businesses and will need to be continually reviewed. 

We also stress the importance of having ‘local’ approaches that are sensitive to the nuances of different payment methods; fraud rates in individual markets and consumer attitudes towards risk and security. 

We have local licenses in different jurisdictions with a single tech integration. Global businesses can leverage these local entities to only apply SCA in regions where it is needed.

“At Checkout.com, we are payment experts and consultants first.”

Maxime Colas, Senior Manager, Checkout.com


We place enormous value on the ecosystem of our clients, especially when it comes to our product roadmap, to ensure that what we’re building meets a need. And we want this ecosystem to be of value to you which is why we facilitate research and roundtables that our merchants can participate in.

 

Receiving strategic advice on SCA will allow you to:

  • Localize your strategy.
  • Apply SCA in a way that makes sense to your unique business profile.
  • Learn from other businesses.
 

2. Frictionless experience: 

One of the key factors why merchants entrust us with their SCA strategy is because they also entrust us with the other aspects of the payment experience. Our 3DS solution is embedded into the wider customer journey so there is no redirection to a third party, which would increase the risk of cart abandonment. What’s more, we are continually developing our solution, so that we get you closer and closer to a completely frictionless experience, while always ensuring you stay on the right side of regulations. 

“Checkout.com’s authentication solutions are totally embedded in the customer journey, so there’s no redirection. And because it’s totally integrated into our platform, there’s no extra work for the merchant to deploy it.”

Maxime Colas, Senior Manager, Checkout.com


For merchants that are not ready to adopt our end-to-end payments platform yet, we can provide the flexibility and capability to support our standalone authentication solution that easily integrates with other payment processing technologies. In this way, we further help merchants to keep down development and deployment costs.

A seamless experience will:

  • Have a solution that is embedded into the customer journey.
  • Be constantly evolving.
  • Easily integrate into your current service / be an end-to-end solution.
 

3. An array of exemptions: 

Most ecommerce business owners are rightfully concerned with the friction that is created at the checkout when SCA checks are applied and the cart abandonment that this could lead to. That is why businesses should carefully consider when not to apply SCA. 

“Exemptions are becoming more and more important for mid-to-enterprise level businesses that process significant volumes of transactions. The more exemptions you can enable, the more control you have over sales.”

Akil Downes, Senior Manager, Checkout.com


Our 3DS solution allows for a wide range of exemptions to be set up, including payments below €30 (with some exceptions); payments to trusted businesses; exemptions on subscriptions and other recurring transactions; low-risk purchases defined by transaction risk analysis (TRA); and corporate payments made with virtual and lodge cards (typically used for business travel expenses) or from central travel accounts.

Therefore, we can apply exemptions to low-risk categories, such as transactions where the acquirer's and/or issuer’s average fraud levels for card payments, and the amount of the purchase, fall within a certain threshold. 

Checkout.com low risk exemption thresholds

  • Average fraud below 0.13% and payment less than €100
  • Average fraud below 0.06% and payment less than €250
  • Average fraud below 0.01% and payment less than €500

 

Timing is important because friction is about perception. Customers are becoming used to the security checks that they get at the checkout. Businesses, therefore, need a considered and evolving approach towards exemptions. Applying them wherever possible may not always be the right option. 

A great exemption strategy is:

  • Based on the risk profile of a business.
  • Agile and easily adaptable.
  • Considerate of the wider customer expectations.

Find a partner that offers you personalized support

SCA has proved a successful part of keeping fraud at bay. Leaning into it and developing a strategy based on data will put you in the driver’s seat. And finding the right partner will be the best way to create a unique strategy that considers the intricacies of your business and its needs.

Download our guide to find out more.