Last year, the EU started to roll out its strong customer authentication (SCA) rules to make it safer to buy things online, but it seems it is making customers abandon their purchases, according to new Microsoft research.
Since September 2019, Microsoft has submitted a small, random percentage of its customer initiated transactions for authentication over EMV 3D-Secure.
The research suggested that the two-step verification processes that is part of the Revised Payment Service Directive (PSD2) rollout has made customers irritated and confused.
That is according to Dean Jordaan, director of e-commerce and payments at Microsoft, who shared the research on LinkedIn.
“Customers abandon checkout at high rates when challenged,” he said. “This suggests customers are confused, don’t like the authentication method, and/or encounter poor implementations of SCA.”
Jordaan added, “Authorisation approval rates worsen with authentication stand-in. This means that merchants are penalized for lack of issuer readiness. Authorisation approval rates improve when the challenge succeeds. A bright spot, this suggests the payments ecosystem can deliver on the promise of SCA.”
The news comes after the industry pressed regulators to extend the grace period for businesses to implement the services to 31 December as the industry felt it wasn’t ready for it yet.
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