Making sure your customers can still buy from you online
The pandemic has undoubtedly changed our expectations when it comes to buying and selling online. Businesses, large and small, have adjusted their business models, with many finding a lifeline in being able to sell online when they couldn’t welcome customers into physical stores. But with nearly a third of the UK population shopping online for the first time in 2020, and almost 90% of shoppers now regularly buying via the internet1, experts are predicting that these changes in shopping behaviour are permanent.
As many people continue to shop online, it’s vital they are confident that all payments being made to your business are arriving safely. That’s why, as part of an industry regulation, stronger protections are being put in place to ensure that the risk of fraudulent activity is reduced.
The new rules
From 14 March 2022, Strong Customer Authentication (SCA) – part of a new industry regulation – will require banks to perform additional checks to ensure that a customer is the correct cardholder (and not a fraudster) when making a purchase. The regulation aims to reduce fraud – making ecommerce more secure – but could also mean that your customer needs to take additional steps during checkout. It also means that if the payment doesn’t meet SCA requirements, it could be declined by their bank.
At Visa, we have been working with clients and partners across the payments industry to prepare for the 14 March 2022 deadline. There are urgent steps you must take to ensure your customers can still buy from your website and this needs to happen in the new year, and before the publicised industy deadline.
Knowledge is power
You have some power to decide how smooth the checkout experience will be for your customers, and ensure legitimate payments can be approved.
We believe one of the best ways to make sure your customers’ payments support the regulation is to add a piece of technology to your checkout called 3D Secure (3DS). Delivered by EMVCo, this technology scans payments as they come through to determine if they seem likely to be fraudulent, and enables banks to ask the customer for more proof of their identity (in line with the regulation).
If you want to make sure your checkout is as smooth as possible, we believe you should use the latest version of this technology, called “EMV 3D Secure”. This version of the technology gives banks more information on a payment, and is more suited to modern tech devices, such as mobile phones and home assistants. Our data shows that when 3DS had been applied, e-commerce fraud can be reduced by half2. What’s more, the fact that implementing 3DS means banks can verify the identity of the cardholder at checkout means that, if fraud does take place, your business could benefit from liability protection in some instances – you can ask your business bank about this.
Implementing SCA is easy: the company that enables your website to take payments or runs the checkout section of your website – it could be your business bank or a payment gateway, for instance – should be able to “switch on” this technology. This will not happen automatically, so if you want to use 3DS, you must ask.
Once you’ve implemented SCA technology, the next way to minimise disruption for your customers is to reduce the number of payments that require further steps at checkout. Not all payments require SCA – there are some payments that are exempt. Working with your bank or gateway, you can indicate if a customer’s payment falls under an exemption, and ensure it passes directly through for bank approval. One exemption, for instance, is that additional checks are not always required for “low value” payments. If many of the products and services you sell are for less than £30, it is worth mentioning this to your bank or gateway.
Challenge or opportunity
Whatever the size of your business, you can be certain that if you sell online in Europe, your customers will, at some point, go through additional checks including needing to provide stronger proof of their identity in line with SCA. To make sure they can, contact the company or bank that provides your website checkout service.
When SCA is enforced it could present either a challenge or an opportunity. With the right preparation, you can reduce fraud and ensure your hard-earned customers can still pay you easily and quickly.
Disclaimer: Case studies, comparisons, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. neither makes any warranty or representation as to the completeness or accuracy of the information within this document, nor assumes any liability or responsibility that may result from reliance on such information. The Information contained herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required.
1 Visa Everyday Spending, June 2020
2 Visa 3D Secure Data