Retailers losing out on £4.3million in daily sales as authentication rule blocks transactions

Data from Barclaycard Payments, which processes £1 in every £3 spent on credit and debit cards in the UK, shows that many online businesses are still not fully compliant with the new Strong Customer Authentication (SCA) regulation – which became mandatory for all transactions last month.

In the biggest change to payments regulation since the rollout of Chip & Pin in 2006, online transactions over £25 are now subject to SCA checks to help combat the £376m of online fraud committed in the UK each year.

SCA adds a security check to all qualifying online transactions, prompting the cardholder to verify their identity through a one-time passcode sent by SMS, a response code generated from a bank-issued card reader, or through approval via their mobile banking app. Cardholders then enter this code into the business’ SCA-compliant checkout to complete the purchase.

These checks have led to a vast number of transactions being declined as many businesses have not sufficiently prepared themselves for the new regulation, with retailers missing out on millions of pounds in sales each day.

Barclaycard Payments data shows that over 22,000 transactions a day, worth £4.3m, have been declined in the month since SCA became mandatory.

Improving customer experience

New research by Barclaycard Payments, demonstrates the importance of using sophisticated payments processing technology to improve customer experience.

The data shows two-in-five online businesses (37 percent) have not introduced any new payments technology on their website over the past two years.

However, of those that have, 92 percent agree that the technology they invested in has improved the checkout experience for their customers – one example being a technology that can help reduce the number of SCA-related declines, with other benefits including an in-depth analysis of where and when basket abandonment takes place.

Businesses can comply with SCA without adding additional layers of friction to the checkout by deploying solutions such as Barclaycard Transact, which leverages an exemption in the regulation owing to its highly sophisticated fraud checks.

The payments technology, which can be added to existing payment gateways, enables e-tailers to reduce the risk of abandoned baskets, while also keeping consumers secure when shopping online.

Barclaycard Payments transaction data shows that in a month, 93 per cent of transactions processed through the Barclaycard Transact platform were approved on the first attempt, compared to just 49 per cent of transactions going through less secure, non-SCA compliant channels.

The solution, developed with customer security and experience at its core, allows online businesses to provide a simpler and quicker checkout process, which in turn is likely to increase consumer loyalty and boost sales.

Rob Cameron, CEO of Barclaycard Payments, said: “One month on from the introduction of mandatory SCA checks, it’s clear that too many businesses are still not compliant and are losing out on millions of pounds in sales as a result.

“Our research shows that adopting new payments technologies can help businesses reduce basket abandonment while offering customers a faster, more secure check-out experience.
The message to retailers is clear; prioritise SCA compliance, simplify the customer journey and take advantage of the latest payments technologies to avoid losing out on sales and customers.”

To help its hundreds of thousands of merchants comply with the new regulations, Barclaycard Payments has been hosting regular webinars on SCA, focusing on the steps businesses can take to protect their online revenue streams.