# Checking out the goods gets easier with SCA Delegation Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2020-01-08 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: 3DS 2.0: Revolutionising Payment Authentication for Retailers Meta Description: Discover how retailers can now take control of payment authentication with the new 3DS 2.0 protocol, reducing cart abandonment and improving customer URL: https://financedigest.com/checking-out-the-goods-gets-easier-with-sca-delegationhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/banking-3-1736838964628-compressed.jpg) By **Ralf Gladis,** CEO and co-founder of Computop Retailers had accepted that with the Payment Service Directive 2 (PSD2) regulations, they had been effectively forced to hand the management of authentication in credit and debit card payments over to the card issuing banks. They argued that this made the checkout process complex, and lengthened the time it takes for customers to complete their purchase, so increasing the number of basket abandonments. Recent changes to the regulation of the Strong Customer [Authentication Delegation](https://www.financedigest.com/psd2-merchants-must-regain-checkout-control-through-delegated-authentication.html "PSD2: Merchants Must Regain Checkout Control Through Delegated Authentication"), however, have delivered a powerful shot in the arm for merchants. 3DS 2.0is the latest iteration of a protocol issued by the major credit card schemes which ensures the secure [authentication of card payments](https://www.financedigest.com/why-latin-america-chose-biometric-authentication-for-payment-cards.html "Why Latin America Chose Biometric Authentication for Payment Cards"). In version 2.0 it fulfils the requirements set up by PSD2 and will become mandatory if retailers are to provide credit [card payment facilities to customers](https://www.financedigest.com/can-banks-acquire-customers-with-biometric-payment-cards.html "Can banks acquire customers with biometric payment cards?"). What it does is to potentially remove [payment authentication](https://www.financedigest.com/the-key-trends-in-payment-authentication.html "The key trends in payment authentication") from banks and instead place it back at the point of purchase with retailers who are enrolled. This not only makes checkout easier it also improves security and will potentially [boost sales](https://www.financedigest.com/winning-fintech-seo-tactics-to-boost-traffic-and-make-more-sales.html "Winning FinTech SEO Tactics to Boost Traffic and Make More Sales"). The new 3DS 2.0 authentication method will provide retailers with a smoother, more user-friendly interaction with their [customers because the previous 3D Secure protocol](https://www.financedigest.com/first-year-of-n-ireland-protocol-required-1-million-customs-declarations.html "First year of N.Ireland protocol required 1 million customs declarations") has been refined. Customers will no longer be [expected](https://www.financedigest.com/banking-from-anywhere-embracing-technology-to-exceed-customer-expectations.html "Banking from anywhere: embracing technology to exceed customer expectations") to move through a variety of processes for every credit card transaction because the multitude of data elements that form the contractual relationship between the retailer and the customer, or the customer’s account, will be transmitted directly to the payment issuer, eg. a bank. They, in turn, perform a real-time risk assessment. If the transaction is categorised as low-risk, the [payment will be authorised instantly](https://www.financedigest.com/the-latest-trends-in-instant-payments-and-how-they-impact-banks.html "The latest trends in instant payments and how they impact banks") and no further interaction from the customer is needed. As well as the user interface for SCA in 3DS 2.0 being much more harmoniously [integrated into the payment](https://www.financedigest.com/building-a-business-case-for-integrated-payments.html "Building a Business Case for Integrated Payments") process than in 3DS 1.0, the embedding of the retailer’s SCA in the checkout also reduces the risk of basket abandonment substantially.  Those retailers that don’t have SCA delegation will find themselves having to ask their card-holding customers to authenticate themselves twice in certain [cases — the first time to log into their customer account](https://www.financedigest.com/demand-from-retail-food-and-beverages-sector-to-account-for-over-70-of-refrigerated-display-cases-sales-study.html "Demand from Retail Food and Beverages Sector to Account for over 70% of Refrigerated Display Cases Sales: Study") with the retailer and secondly to initiate the payment.  This becomes an even more unwieldy processif the customer is using a mobile device. The consideration for retailers who are resistant to the idea of using SCA delegation is that this additional hurdle in [payment could result in their customers](https://www.financedigest.com/why-late-payments-are-hurting-your-customer-as-well-as-your-business.html "Why late payments are hurting your customer, as well as your business") turning to other retailers where checkout is smoother, or in customers demanding other methods by which they can complete their payment. Customers are interested in convenience and expect the [retailers they shop with to ensure their payment is made](https://www.financedigest.com/britains-next-buys-failed-furniture-retailer-made-com-400-jobs-axed.html "Britain’s Next buys failed furniture retailer Made.com, 400 jobs axed") securely and speedily, particularly when they are shopping on the go. Fortunately, the major [credit card](https://www.financedigest.com/what-happens-to-credit-card-debt-when-you-die.html "What happens to credit card debt when you die") companies are supportive of authentication moving from issuers to retailers and they can help with the integration process, but the responsibility for ensuring it is in place and working properly does fall with the retailer. A significant advantage, however, for larger retail operations with [customer call centres is that they will no longer need](https://www.financedigest.com/3-reasons-your-business-needs-customer-reviews.html "3 reasons your business needs customer reviews") to support dozens of different authentication methods. To be most successful, retailers should [seek](https://www.financedigest.com/ukraine-seeks-debt-payment-freeze-as-war-ravages-economy.html "Ukraine seeks debt payment freeze as war ravages economy") payment service providers that deliver the necessary infrastructure to set up the SCA delegation for both smartphone and Internet browser payments. **Depending on biometrics** An important element of SCA, particularly for consumers who like to purchase via mobile devices, is the [biometric authentication](https://www.financedigest.com/behavioral-biometrics-simple-and-secure-way-to-authenticate-consumers-digital-identities.html "Behavioral Biometrics: Simple and Secure way to Authenticate Consumers’ Digital Identities") options that are being used when they log-in. The FIDO standard (which is committed to [providing open and free authentication standards](https://www.financedigest.com/new-isla-standards-provide-the-foundation-for-resource-optimisation-efficiency-and-risk-mitigation.html "New ISLA Standards Provide the Foundation for Resource Optimisation, Efficiency and Risk Mitigation")) guarantees that the biometric data, which could be a fingerprint or a facial scan, is processed in encrypted form and that this data never leaves the device on which it is queried. Use of biometrics also means that passwords are not necessary thus reducing the incidence of [customer data](https://www.financedigest.com/why-now-is-the-time-for-banks-to-use-their-data-to-support-customers.html "Why now is the time for banks to use their data to support customers") being phished or stolen. The biometric data is not simply copied to the device on which it is read, but stored as hash values. Even a face scan or fingerprint cannot be stolen, provided the biometric solution [meets the required standards](https://www.financedigest.com/beijing-meets-state-air-quality-standards-for-first-time-in-2021.html "Beijing meets state air quality standards for first time in 2021"). Retailers can use this [biometric authentication to send over a ‘flag’ to the card](https://www.financedigest.com/fingerprints-supports-two-more-biometric-payment-card-launches-in-the-mena-region.html "FINGERPRINTS’ SUPPORTS TWO MORE BIOMETRIC PAYMENT CARD LAUNCHES IN THE MENA REGION") issuer that authentication has already been executed, so the customer is not challenged to provide another authentication request by the bank. This reinforces the control of the retailer, which will undoubtedly have a [positive impact](https://www.financedigest.com/broadcast-switchers-market-increasing-adoption-of-ip-live-production-technology-to-positively-impact-growth.html "Broadcast Switchers Market: Increasing Adoption of IP Live Production Technology to Positively Impact Growth") on the relationship with customers, and enhance the brand in the market. When it comes to using SCA delegation in practice, ideally, retailers should integrate the corresponding step at which it takes place as early as possible in the purchasing process, for example, the moment customers log into the retailer’s [app or enter the online store](https://www.financedigest.com/apple-given-fourth-dutch-fine-in-app-store-dispute.html "Apple given fourth Dutch fine in App Store dispute"). Once this step has been taken, the relevant biometric information can be sent to the issuer together with the other [data points relevant for 3DS 2.0 in encrypted form to prove that the retailer has already provided](https://www.financedigest.com/comparative-analysis-of-the-best-data-room-providers.html "Comparative Analysis of the Best Data Room Providers") compliant authentication.This gives the retailer an opportunity to further reduce any problems that could occur during the conversion from order to payment. There is an added bonus to the integration of biometric authentication – it not only protects the customer, but this extends to the retailer too, who would previously have been absorbing many of the negative outcomes of fraudulent activity, from identity theft through to a [customer account takeover – effectively](https://www.financedigest.com/5-simple-steps-to-an-effective-customer-complaint-response-strategy.html "5 Simple Steps to an Effective Customer Complaint Response Strategy") creating a win/win for all parties involved. Retailers would be wise to [adopt Delegated Strong Customer Authentication](https://www.financedigest.com/strong-customer-authentication-must-be-adopted-to-make-open-banking-a-success.html "Strong Customer Authentication must be adopted to make open banking a Success") (DSCA)if possible, as the benefits speak for themselves. With retailers “owning” SCA, [customers get a more user-friendly experience](https://www.financedigest.com/getting-customer-experience-right-in-financial-services.html "Getting customer experience right in financial services") without having to log in twice to complete a purchase.  As a result, retailers can be more [successful at driving](https://www.financedigest.com/a-winning-team-how-corporate-champions-can-drive-successful-collaborations.html "A winning team: how ‘corporate champions’ can drive successful collaborations  ") basket conversions. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---