CMSPI releases SCA Economic Impact Assessment June 2021 analysis

The SCA enforcement deadlines for smaller value transactions have been reached in most European countries, and the latest data illustrates significant transaction failure with the estimated European failure rate on transactions at 25% compared to 26% in May 2021. Although the improvement will be welcomed by merchants, the estimated failure rate suggests significant friction at checkout for consumers. Therefore, the issues merchants and consumers are facing in relation to SCA are still very much alive. 

Source: CMSPI, Strong Customer Authentication – Impact Assessment: June 2021

Failure rates on transactions being challenged through 3DS V2 are still extremely high, CMSPI reports, and in Belgium, Germany, and Italy they reach 38%, 33% and 29%, respectively. These countries have the highest failure rates of all the countries considered as of June 2021. On a European weighted average basis, CMSPI estimates suggest that there has been an improvement since August 2020, with transaction failure improving by ten percentage points from 35%. 

Source: CMSPI, Strong Customer Authentication – Impact Assessment: June 2021

Extrapolated over the course of a year and applied to online retail volumes, if these rates were to continue, it would mean over EUR 76 billion of sales at risk due to declines or abandonment for retailers. These high rates of failure are largely the result of continuing fundamental issues occurring within the payments supply chain, further explored by CMSPI in their assessment. 

CMSPI is a global, independent payments consultancy, working exclusively with some of the world’s largest merchants, implementing optimal payments strategies and supply chains. The consultancy collaborates with merchants only and has no affiliation to any financial institution or bank. Besides, CMSPI's advocacy and economics team works closely with global regulators and trade bodies, representing merchants in collective efforts to campaign for fair and transparent payments landscapes worldwide. To learn more about CMSPI’s Strong Customer Authentication (SCA) Impact Assessment, please click here for April 2021 and here for May 2021.