UK’s Financial Conduct Authority further extends SCA deadline

The UK’s Financial Conduct Authority (FCA) have extended their deadline for implementing Strong Customer Authentication (SCA) for e-commerce transactions to 14th of March 2022.

“This further six month extension is to ensure minimal disruption to merchants and consumers, and recognises ongoing challenges facing the industry to be ready by the previous 14 September 2021 deadline,” reads the announcement on the FCA website. “The new 14 March 2022 deadline is the latest we expect full SCA compliance for e-commerce transactions.”

The implementation of SCA compliance on the continent has seen a drop in conversion rates which no one can really welcome. It’s hard for merchants and even for consumers, if you’re trying to click the buy button and it’s too onerous to complete the transaction .

PSD2 has already come into force across Europe’s major e-commerce marketplaces, and the negative impact on conversion rates has been significant.

For example, e-commerce merchants in France and Spain have experienced on average a 25{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} reduction in conversion rates, a 30{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} reduction in Germany, and up to 40{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} of transactions are being lost in Italy, costing merchants millions of Euros per month.

Many of these transactions can be exempted or excluded from the scope of PSD2.

Across the board, merchants are struggling to manage the significant changes to their payments process, and it has been observed that a lack of issuer readiness, as well as low levels of customer co-operation with the increase in friction at the checkout are part of the problem.

The desired impact of PSD2 is to reduce levels of fraud, but in reality, the outcome at the moment has been to frustrate customers and deprive merchants of much-needed revenue.