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The Dark Side Of PSD2

Fraudsters’ reaction to the EU regulation

Long before it came into effect, PSD2 has been a topic of relentless discussion for payment professionals. Not a week goes by without a new webinar, report, or article about the EU’s new regulation, attempting to educate online merchants about Strong Customer Authentication (SCA) and its effect on friction and customer drop-off. Working to adapt to the PSD2 reality, there is another group of users that lurk in the dark, waiting, learning. Fraudsters.

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Description

As PSD2 measures are adopted across the EU, SCA will likely reduce card-not-present fraud in intra-European transactions. But SCA is certainly not fraud-proof. Fraudsters have proven themselves resourceful and adaptive. With PSD2 presumably making their lives harder, they will try to exploit whatever they perceive to be the weakest link.

While fraudsters are busy finding ways around the new safeguards, forward-looking merchants are already working on updating their fraud prevention strategies in order to offset the impact of PSD2 on fraud MOs. By doing so, they stand to benefit from the clear incentives the regulation sets for merchants with low fraud rates.

This report takes a deep dive into the dark web to surface fraudsters’ response to the new regulation. It highlights the incentives offered for merchants able to maintain low fraud rates under PSD2. Finally, it examines the excessive friction paradox with a first-of-its-kind quantitative analysis and provides a clear suggestion for revising the TRA exemption thresholds

Additional information

Language

Русский

Pages

26

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