7 Days! .. Payer Authentication, changes and impact

In the previous article; 3D Secure: Getting ready for the unavoidable October 2022 deadline!, I have highlighted some information on how 3D Secure works, the revolution in authentication, transformation into 3D Secure version 2 and its features, with several indicators on issuers’ performance.

The sunset of 3D Secure version 1 is 7 days away. The adoption of 3D Secure version 2, by all stakeholders in the payments’ ecosystem, is inevitable and around the corner. Issuers are the key player in the payer authentication chain. If an issuer is not fully ready for 3D Secure version 2, what is the impact for the cardholders? What can issuers do to minimize the impact?

As the deadline is very close, issuers need to do some last experiments with their payer authentication capabilities. Let’s all assume today is 15th of October, and all of the traffic is routed to 3D Secure 2. There are two probable outcomes of this experiment; either authorizations are working properly as desired, or there is some work to do, right? If issuers can do this, so they still have 7 days to mitigate any issues for their cardholders.

Payer authentication should be an opportunity and not a burden, especially with the introduction of 3D Secure version 2. It is for the benefit of all stakeholders in payments to reduce false-negative declines to the maximum possible. It is costing online businesses enormous amount of revenues annually. Moreover, when properly implemented, cardholders are expecting a frictionless experience endorsed by their issuers.

Observations

There are 7 issuers, among the top ones in UAE, whose authorization rate of 3D Secure version 2 has dropped in September. Those issuers are First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Mashreq Bank, National Bank of Ras Al-Khaima, Commercial Bank of Dubai, And Al Hilal Bank.

While this is concerning, there are other issuers who improved their 3DS version 2 performance. Some of those issuers have experienced growth in authorization rate, on 3D Secure version 2, up to 49% for the same month, showing healthy performance.

Zooming in?????????

If we focus on the first week of October, there is an improvement in authorization rates of UAE issuers. For a sample of the top 15 issuers in UAE, there is an average growth of 13.2% in authorization rate for 3D Secure version 2. Important to say, there are still some issuers with alarming performance. These fluctuations are not giving the desired comfort to the payments’ ecosystem.

Conclusion

Issuers still have an opportunity to tackle any turbulence with the performance of their authentication on 3D Secure version 2. Identifying the gaps, fixing it, and monitoring the acceptance performance are all what is needed to improve the experience of the cardholders.

After 15th October, some cardholders might suffer when carrying out an online transaction, and the only reason is an issuer who did not implement the right technology and methodology for payer authentication on 3D Secure version 2.

On track

Emirates NBD, HSBC, Citibank, Standard Chartered Bank, Sharjah Islamic Bank and 12 other UAE issuers are showing healthy performance on 3D Secure version 2. What is important, is to maintain high performing payer authentication, not only to drive more business to the issuers, but to ensure cardholders are satisfied, as well as boosting online commerce in UAE.

I am hoping for the entire industry to make this an amazing migration and that consumers will be the ones benefiting the most!