Using Digital Footprints for Transaction Risk Analysis

How can payment gateway providers add a new layer of data to prevent online transaction frauds?

SCA impact on shopping cart abandonments

Strong Customer Authentication (SCA) is a security protocol that requires customers to provide two or more forms of authentication during the process of online payment. This usually involves a password or a fingerprint scan.

SCA was introduced as a mandatory requirement by the European Union's Payment Services Directive 2 (PSD2) in September 2019 to increase the security of online payments and protect customers from fraudulent activities.

Even though SCA was meant to shield against fraud and unauthorized transactions, the side effects can happen way too often. As a result, even low-risk transactions can be subject to SCA. According to research, this fuels shopping cart abandonment and leads to a significant drop in conversion rates for online payments, with a decrease of up to 50% in certain cases.

The role of Transaction Risk Analysis on SCA exemptions

Transaction Risk Analysis (TRA) is becoming increasingly popular as a method of authentication, to exempt SCA when it’s not necessary. The process of TRA denotes analyzing a range of transaction risk factors, including the amount of the transaction, transaction history, GEO location, to detect if another layer of authentication is necessary.

  • Frictionless Customer Experience: TRA helps to strike a balance between security and convenience. In other words, SCA is only triggered when necessary, but TRA takes center stage by making the checkout process quicker and easier for customers.

  • Digital Footprints Increase TRA Exemption Accuracy: Fido automatically detects them based on known patterns of fraud. The process of analyzing these footprints can provide valuable insights into customer identity and behavior, which can help improve the accuracy of TRA.

  • Signal-Driven TRA: Fido's Key to Payment Security: Fido's cutting-edge products deliver in-depth digital footprint signals, including phone signals, email signals, IP, device, and browser analysis, empowering Payment Gateway Providers to make well-informed decisions and streamline their overall risk management strategies.

TRA relevant digital signals

Discover different types of digital signals that can play an important role in Transaction Risk Analysis.

Email address
Phone number
IP address

Want to know more?

Download the full-version of this white paper and learn how digital footprints can help to prevent online transaction frauds.

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