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Payneteasy 3DS Adapter: Your Ally in Preventing Friction at Checkout
07.10.2022
4 min
Achieving the balance between advanced payment security and a smooth shopping experience is an omnipresent challenge for online merchants. This dilemma is especially prominent nowadays, as sellers face regulations that require multiple authentication steps and make order placement less vulnerable to fraud yet more time-consuming and complex.
As of 2022, 17% of shopping carts get abandoned due to a complicated checkout process1. This makes merchants wonder what can be done to make payment authentication frictionless while staying compliant with the legislation in force. We’ve found a solution that can help vendors get the best of both worlds - read on for info about it and updates on the latest EU security guidelines!
Current Payment Security Regulations EU Sellers Are Facing
The Second Payment Services Directive (PSD2) is a set of laws addressing transactions in which at least one of the PSPs is located in the European Economic Area. These guidelines introduced in 2016 are expected to be replaced with an updated version (PSD3) in early 2023.
The main goal of PSD2 and the upcoming PSD3 is to reduce instances of fraud and ensure a secure transaction process for consumers, merchants, and financial institutions. However, while the payment security benefits these guidelines provide are immense, they add extra steps to the checkout process, making it less appealing for consumers.
What Is SCA and How Does It Slow Down the Checkout Process?
Strong Customer Authentication is a requirement of PSD2 that focuses on making online and contactless offline payments less prone to data breaches by creating an additional authentication layer at checkout.
According to SCA, consumers must provide at least two of the following proofs of their identity when making a purchase:
- Something they know (password or PIN)
- Something they have (smartphone or hardware)
- Something they are (biometrics)
While SCA is a step in the right direction when it comes to combating payment fraud, it causes friction and hurts conversion rates.
Which Role Does 3DS2 Play?
3-D Secure 2.0 (3DS2) is an integral part of SCA in Europe. It is a security protocol that deals with online card payments and requires vendors to provide additional data about every transaction. This helps the issuing banks determine whether the identities of the cardholder and the person initiating the purchase match.
3DS2 is an extra layer of security that is meant to reduce the likelihood of customer chargebacks and eliminate the friction caused by its previous version (3DS). Yet, it often results in merchants losing customers due to a lengthy and inconvenient checkout process.
The Other Side of Advanced Security
The period between January and May 2021 was marked by the increasing adoption of 3DS as well as a 20% decline in reported payment fraud cases2. What’s more, between December 2020 and April 2021, the volume of fraud also declined by 40% for acquirers and 50% for issuers3.
While SCA and 3DS are undeniably beneficial for banks, the verdict isn’t as straightforward when it comes to online merchants. The latter also experience the advantages of reduced fraud yet lose a share of potential customers at the checkout stage. For instance, in the UK, it is estimated that approximately 30% of 3DS transactions are failed or abandoned4, which largely affects eCommerce businesses.
Additional security measures can lead to such unwanted consequences as:
- False declines during checkout
- More complex integration with multiple acquirers
- Higher cart abandonment rate
- Decrease in conversions
- Lower revenues
But is there a way to avoid friction at checkout, comply with the current regulations, boost security measures, and maintain the sales flow? Payneteasy has a solution!
Payneteasy 3DS Adapter — the Key to Frictionless Payments
Payneteasy newly launched 3DS Adapter is the only tool merchants and PSPs need to make the transition to the 3-D Secure protocol smooth and avoid friction at checkout.
It is a fully PSD2-compliant and easy-to-integrate solution, with the help of which you can:
- Comply with PSD2 guidelines by adding an extra authentication step required by the SCA without it being noticeable to the clients
- Achieve an authentication rate of 95%+ due to a simplified verification process
- Customize the checkout process with 150+ data parameters
- Optimize payment processing for web, mobile, and in-app purchases
Reach out to us for more information about this state-of-the-art solution and take a step toward an all-around improvement of your clients’ shopping experiences!
1 - Baymard Institute - 48 Cart Abandonment Rate Statistics 2022
2 - Checkout.com - What is the global outlook for customer authentication and its future?
3 - The Payment Association - The Long and Winding Road to SCA
4 - Finextra - UK merchants warned to get ready for imminent SCA