EPA report finds UK merchants not ready for SCA

A report released by the Emerging Payments Association (EPA) has concluded 75% of issuers said they would be ready for the strong customer authentication (SCA) 14 September deadline, at least from a compliance standpoint not operational.

Titled ““Issuer Declines”: The impact of SCA on payments users the report also claims issuers “will likely not be able” to support the full extent of exemptions and 3DS v2.2 until late 2019 “at the earliest.”

The whitepaper highlights 74% of issuers expect SCA to lead initially to a decline in user experience and 58% felt that “too much friction” is being introduced.

On top of this, the report predicts between 30-50% of eCommerce transactions will in future face a step-up authentication request, up from the current 2% level.

It claims issuers “expect in the short term” to decline between 25-30% of transactions unless a managed roadmap is agreed. 

Tony Craddock, director general of the EPA, commented:“Instinctively, everyone sensed SCA was going to cause major issues. This research confirms exactly that. 

“But it’s not too late to do something about it, and by following the recommendations in this paper, we can minimise the detrimental impact of SCA on consumers, retailers, PayTech and UK plc.”

The report was developed through interviews with organisations who issue over 107 million cards, which the EPA claims comprises 61% of all cards issued in the UK.

Mark McMurtrie, director, Payments Consultancy Ltd (who conducted the research on behalf of the EPA) said: “It is clear that the industry needs more time before active enforcement of SCA otherwise the negative impact is likely to be extremely high and painful.

“A managed rollout is needed and, if granted, would allow far higher levels of awareness to be achieved, greater solution availability, system integration to be completed and time to resolve the many outstanding issues.”