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.