Card-not-present (CNP) fraud is on the rise. In 2020, CNP fraud cost companies an estimated $35.5B globally, and that number is only projected to grow as more consumers shift to online channels to purchase products.
As a result, business owners need to integrate as much security as possible into their online payment platforms. One of the most important methods to prioritize is strong customer authentication (SCA).
Here's what you can expect to learn in this article:
For those who are unaware, SCA is a regulatory requirement for online European businesses that aims to help reduce fraud. It also strives to reduce the risk associated with offline contactless payments.
As the name suggests, strong customer authentication is much more robust than conventional authentication practices. This means that you typically need to include at least two of the following:
When these regulations begin to become enforced, banks and online merchants will be required to deny transactions that do not sufficiently meet these criteria.
SCA adds an additional layer of security to online purchases.
Some merchants have begun to worry that it requires too much information from their buyers. Others are concerned that customers won’t want to spend the time providing this information.
In reality, the benefits heavily outweigh the drawbacks.
It’s important to note, though, that certain transactions are exempt from these requirements. These include:
These are essential to keep in mind. Although they may not adhere to SCA obligations, fraudulent behavior could still occur. Using SCA in combination with a fraud prevention solution like Vesta's Payment Guarantee can add even more protection. Our platform allows merchants to quickly detect suspicious behavior and minimize the chances of fraud occurring. Over time, this can save your business thousands in chargeback remediation expenses.
It can also help you determine the risk of a particular payment. In practice, you can streamline low-risk transactions and prevent any interruptions in the payment process.
From here, you can take advantage of increased security without impacting your bottom line.
Otherwise, you won’t be as protected as you should against fraud attacks. This could easily result in damage to your business's reputation and heightened expenses related to chargeback fraud.
Strong customer authentication will help ensure that you're able to stop fraudsters before they can inflict serious damage on your business. If you're interested in learning more about how Vesta can help improve your fraud prevention program, request a demo of our platform today.