Strong Customer Authentication: Friend or Foe?

A new Aite Group report finds that the payments industry considers SCA a significant risk to conversion in e‑commerce.

London, 16 January 2020 — Payment fraud is an increasing problem for online merchants. As e‑commerce growth rates rapidly outpace those at the physical point of sale, this is further fueling the growth of card-not-present fraud. To protect consumers and businesses from falling victim to fraudsters, and to preserve trust in online commerce, the European Commission has mandated the use of two-factor authentication for digital payments in the European Union. The latest Aite Group report, Strong Customer Authentication: Friend or Foe?, assesses the market impact of SCA in Europe. 

“SCA is a double-edged sword. The direct savings for the industry on fraud losses could be in the order of US$750 million,” states Ron van Wezel, senior analyst at Aite Group. “The indirect savings would be even higher, as SCA will help businesses reduce the operational costs of fraud management. On the other hand, the industry considers SCA a significant risk to online commerce sales in the first year after its introduction,” he explains.

This report analyzes the market impact of SCA and how organizations can manage the goal of a frictionless checkout process for digital consumers with the seemingly conflicting requirements of fraud prevention. It is based on an Aite Group and Merchant Payment Ecosystem online quantitative survey of 88 experts from banks, payment service providers, merchants, and other organizations in November 2019.

To request a press copy of this report or to speak with Ron van Wezel about this topic, please contact us at [email protected].

About Aite Group:
Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, insurance, wealth management, and the capital markets, we guide financial institutions, technology providers, and consulting firms worldwide. We partner with our clients, revealing their blind spots and delivering insights to make their businesses smarter and stronger. Visit us on the web and connect with us on Twitter and LinkedIn.

Press Contacts:
Siobhan Scanlan
Public Relations
[email protected]

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