Due to PSD2, Strong Customer Authentication (SCA) is required for all EEA countries when transactions are in-scope. Declines for ‘Missing Strong Customer Authentication’ indicate a decline was caused by a lack of SCA (3DS). These declines may begin to increase at different times depending on the country and their banks. So far, we are seeing this decline reason for the below EEA countries:
- United Kingdom
Australia’s CNP Fraud Mitigation Framework requires Strong Customer Authentication (SCA or 3DS) for some merchants. One similarity to PSD2, is that the scope is limited to “two-legged” transactions, where the cardholder’s issuing bank and the merchant’s acquiring bank are both in Australia. However, Australia’s SCA requirement is less broad, aimed at merchants with high fraud.
The below 4 conditions must be met for a merchant to trigger the SCA requirement for Australia:
- Cardholder’s issuing bank is Australian.
- Merchant’s acquiring bank is Australian.
- Merchant’s in-scope fraud rate is 20bps or 0.2% (calculated by dollar value).
- Merchant’s in-scope fraud dollars per quarter total more than $50,000.
Here are a few example scenarios to consider based on the above criteria:
- A merchant with a fraud rate of 0.2% for in-scope sales would need to exceed $25,000,000 in quarterly in-scope sales to exceed the $50,000 fraud threshold.
- A merchant with a fraud rate of 1% for in-scope sales would need to exceed $5,000,000 in quarterly in-scope sales to exceed the $50,000 fraud threshold.
The Reserve Bank of India mandates two-factor authentication (3DS) for transactions where the cardholder’s issuing bank and the merchant’s acquiring bank are both in India. But some merchants enable 3DS authentication even without a local Indian acquiring bank, which can inadvertently increase declines. If higher declines are experienced with 3DS for India issued cards processed through acquiring banks outside of India, then disabling 3DS is recommended.
Presenting in local currency is when a merchant charges a customer in the currency local to them. Many merchants instead charge in the currency local to their business, which has negative impacts including:
- Higher cart abandonment due to the cardholder not knowing the final cost.
- Higher rate of declines from the cardholders’ banks due to perceived risk.
- Higher billing inquiries from cardholders confused by converted amounts on statements.
- Higher chargebacks from cardholders seeing a price they didn’t agree to on their statements.
Based on our global internal data, cardholders’ issuing banks approve transactions in local currency at a rate that is 12% higher than non-local currency, on average.
Local currency is recommended for all countries, but these 20 countries see the biggest % lift:
- Argentina (ARS)
- Australia (AUD)
- Austria (EUR)
- Chile (CLP)
- Czech Republic (CZK)
- Denmark (DKK)
- Hungary (HUF)
- Indonesia (IDR)
- Israel (ILS)
- Malaysia (MYR)
- Mexico (MXN)
- Norway (NOK)
- Philippines (PHP)
- Romania (RON)
- Saudi Arabia (SAR)
- South Africa (ZAR)
- Sweden (SEK)
- Switzerland (CHF)
- Turkey (TRY)
- Viet Nam (VND)
Updated about a month ago