Chargebacks911, Fi911 launch report to support FIs prepare for full PSD2's SCA enforcement

Wednesday 17 March 2021 15:03 CET | News

A new report from Fi911 and sister company Chargebacks911 shares insights regarding the full implementation of PSD2’s Strong Customer Authentication, including the fact that when handled incorrectly, SCA can cause low acceptance rates, increased abandonments, and more friction during the checkout process.

Fi911 recommends that issuers optimise their risk-based decisioning processes to help standardise them across the sector. In addition, it also advises acquirers to consider SCA compliance as just a starting point in fraud management, urging them to look beyond the 3-D Secure 2.0 protocol as a precedent for their anti-fraud and authentication processes.

The company also informed that while SCA-compliant tools like 3-D Secure 2.0 are a strong way to protect against fraud pre-transaction, it will not prevent post-transactional threats such as illegitimate chargeback – which are also known as friendly fraud. Moreover, while SCA can help reduce issuances caused by merchant error and criminal activity, friendly fraud is set to represent an even greater share of future chargeback rates.

Data from Fi911 suggests that global chargeback issuances will see a compound annual growth rate (CAGR) of 16.3% annually between 2018 and 2023. The majority of these cases will be instances of friendly fraud, accounting for 61% of all chargebacks in North America and 73% in Europe.

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Keywords: Fi911, Chargebacks911, fraud prevention, PSD2, SCA
Categories: Fraud & Financial Crime
Countries: Europe
This article is part of category

Fraud & Financial Crime