Unlocking a Consistent Path to Purchase in the Wake of SCA

Woman usinfg her laptop and credit card to make an online purchase

A path to purchase is the journey that a customer will make across a variety of touchpoints before making a purchase. These touchpoints include logging in to an account, browsing an online shop, and hitting that all-important ‘Buy Now’ button. Consistency on this journey is key to curating a positive experience that encourages customers to return and continually buy from your business.

However, the introduction of Strong Customer Authentication (SCA) under the second Payment Services Directive (PSD2) has disrupted the ecommerce market. Its secure payment objectives are creating friction and inconsistencies at the last step of the customer’s path to purchase.

One consumer survey shows that inconsistent customer experiences are enough to make 60 per cent of shoppers switch brands. So, how do we ensure that the path to purchase is consistent and that checkout experiences are seamless?

Here, we explore the importance of a consistent path to purchase and why the checkout is the most significant step for your business’ ecommerce store.

Why is consistency important?

Consistency is significant across every part of the customer journey, and maintaining this standard can leave a lasting impression for consumers. Reliability allows consumers to recognise credibility in your brand. Consumers should recognise dependability in your products and services, understanding that a fluid shopping, checkout, and delivery process is partnered with a quality item or service.

The customer experience is a priority for many business leaders. In one survey, 45.9 per cent of businesses said that customer experience will be a top focus for the next five years. Product and pricing take a backseat, being a priority for only 33.6 per cent and 20.5 per cent respectively.

UK consumers, especially, have high expectations for payment experiences. Speed and ease of payment were considered as the most important factor when making an online purchase for 43 per cent of UK shoppers. This compares to only 33 per cent in Germany, 32 per cent in France, and 17 per cent in Spain.

However, as new Strong Customer Authentication (SCA) regulation impacts checkout processes in the UK and the EU, consistent and easy payments are set to flounder.

45 per cent of UK consumers said that they would be frustrated if their favourite brand introduced new security processes during online checkout. Meanwhile, 23 per cent of people would shop less with their favourite brand if these new processes were introduced.

While retailers have done well to create a good customer experience for online shoppers, it’s clear that changing fraud prevention regulations has an impact on the customer journey at the last moment.

Authentication creates inconsistencies

SCA has created more friction across the checkout process. To approve payments, customers must have their identity verified through a two-factor authentication. These authentications will look at two of three factors: knowledge, possession, and inherence. Ultimately, these checks aim to reduce the risk of fraud.

However, SCA can also create inconsistencies that customers will not appreciate. Returning customers may now be faced with new, additional scrutiny to complete their purchase. Even then, not every transaction will require SCA to implement an authentication check. Out of scope transactions and other exemptions mean that on one visit, a customer may have an easy checkout experience, but on the next, they may be asked for verifying passwords, knowledge tests, and be taken to external browsers. After an easy shopping experience, why does the checkout have to be so difficult?

These inconsistencies in the customer path can lead to cart abandonment and dissuade returning customers, impacting customer lifetime value. When asked for a reason why they would not shop with a specific retailer again, 41.7 per cent of shoppers referenced the frustration of being directed to another site for credit card verification. Multiple steps to verify their identity was also a significant reason not to shop with a retailer again for 30.6 per cent of consumers.

As the final step on the customer path to purchase, payments are proving themselves to be a tricky one to get right. It’s clear that a seamless authentication strategy is key to progressing the success of customer journeys to completion.

Seamless authentication

To curate consistent paths to purchase, merchants must work to avoid uncontrolled friction at checkout. Achieving this relies on a seamless authentication strategy. By using effective payment technology, services, and platforms, merchants can utilise further SCA exemptions, reduce the fraud rate, improve the customer experience, and boost revenue.

Firstly, merchants should ensure that they’re using the latest version of 3DS2. While 3DS1 is a compliant solution to SCA, it has limited capabilities that can cause additional friction at the checkout. For example, soft decline notifications are not available on 3DS1. This means that a higher proportion of payments will be declined. This works against customer expectations, where being declined for purchase by a retailer when there wasn’t a problem would be reason enough to avoid a retailer for 57.6 per cent of consumers. 3DS2 allows for soft declines that trigger an authentication process while also utilising some SCA exemptions.

Next, consumers should utilise a smart SCA exemption engine. These platforms are built for intelligent transaction routing, achieving the best authentication optimisation using SCA exemptions. In turn, merchants should expect to see a more consistent checkout experience for customers as their fraud rate improves.

Finally, merchants can benefit from delegated authentication, where a merchant can directly authenticate a customer, skipping the redirection to the issuer and facilitating a more seamless customer experience, something previously only issuers were able to do. For most genuine customers, the checkout experience will become frictionless, with authentication taking place in the background. Customers will recognise the ease of use and return to your store again for further convenience.

The final step in the customer’s path to purchase is essential, and in many ways, it can become the first step in a new journey for returning customers. The checkout process represents a brand’s security, convenience, and reliability. Ensuring that SCA does not disrupt the consistency of this journey begins by understanding the impact of payments on your customers. Proactive and intelligent solutions are key to boosting positive experiences.

Rebecca Grewcock
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