Editor's Choice Europe Fintech Regtech

Fi911 Report Supports Financial Institutions in SCA Enforcement

The chargeback specialist for financial institutions (FIs) and sister company of Chargebacks911, Fi911, has launched a new report to support FIs in their preparation for full PSD2’s Strong Customer Authentication (SCA) enforcement.

The report, ‘Strong Customer Authentication: The State of SCA Adoption in 2021′, shares actionable advice and insights for acquirers supporting their merchants with compliancy, as well as issuers getting ready to filter transactions under the new regulations.

Craig McClure, Director of Relationship Management at Fi911, commented: “SCA is a controversial beast that merchants and FIs are approaching slowly and with great caution. Handled incorrectly, it can cause low acceptance rates, increased abandonment, and more friction during the checkout process.

“However, it also has the potential to be hugely positive for the e-commerce space – providing we see a rapid collaborative effort across the payments industry and a response in the form of data-driven decisions, solutions and tools.”

In the first instance, Fi911 recommends issuers optimise their risk-based decisioning processes to help standardise them across the sector.

It also advises acquirers to consider SCA-compliance as just a starting point in fraud management, urging them to look beyond the 3D Secure 2.0 protocol (the main security tool being used to ensure compliance) as a precedent for their anti-fraud and authentication processes.

Tracy Cray, Director of Card Scheme Compliance at Fi911, added: “SCA is a great basis for an FI’s multifaceted fraud management, but it is not the be-all and end-all. Especially since fraud attack rates are soaring at unprecedented rates (25%+) across all transactions due to COVID-19 and the subsequent boom in e-commerce activity.”

Cray explained that while SCA-compliant tools like 3D Secure 2.0 are a strong way to protect against fraud pre-transaction, it will not prevent post-transactional threats such as illegitimate chargeback (otherwise known as friendly fraud).

She continued: “We’ve recorded a major escalation of friendly fraud and chargeback claims in recent years, and this has grown dramatically since the pandemic began – some industries have seen 10 times the amount of chargebacks than before COVID-19. While SCA can help reduce issuances caused by merchant error and criminal activity, friendly fraud is set to represent an even greater share of future chargeback rates.”

Data from Fi911 suggests that global chargeback issuances will see a compound annual growth rate (CAGR) of 16.3% annually between 2018 and 2023. The majority of these cases will be instances of friendly fraud, accounting for 61% of all chargebacks in North America and 73% in Europe.

Cray added: “Fraudsters may gravitate further towards claims of packages not arriving, packages being damaged, or goods not being as described, since these can be submitted/filed 120-days after a transaction has been completed and authorised through SCA.”


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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