PSD2, SCA & 3D Secure 2 – Guide for Merchants

You may have heard the terms PDS2, SCA and 3D Secure being used here and there in recent months, and for good reason. They are part of the terminology introduced by the new regulations that came into force for merchants in much of the EU in April and will be fully mandated on September 14th, 2019 for payments in all EU/EEA countries that fall within the scope of the directive.

Learn the lingo

Before we get into the practical implications of the new regulations, let’s take a moment to get the terminology straight. 

PSD2 determines which transactions require Strong Customer Authentication. SCA is the method of authentication mandated by PSD2. For e-Commerce transactions, it is mostly fulfilled with 3DS 2.

The Second Payment Services Directive – PSD2 – went live in January 2018, with the aim of creating an open banking market, with faster, safer and more transparent payments.

In part, PSD2 will achieve this by: 

  • Enabling third parties, such as payment providers and fintech companies, to directly access consumers’ bank data via secure APIs (with the consumer’s consent). 
  • Using Strong Customer Authentication (SCA) methods to protect both consumers and merchants from fraud. 

Did you say “strong” customer authentication? 

The idea behind Strong Customer Authentication, as required by PSD2, is that it enables merchants, acquirers and issuers to clearly identify the shoppers in real time and make sure that their payments are authorised. In doing so, it makes online payments more secure and reduces fraud.  

Once the SCA requirements come into effect in September 2019, consumers will have to be authenticated with at least two of the following types of information:

  • something they know (e.g., a password, PIN or a secret fact)
  • something they own (e.g., their mobile phone, a wearable device or a token)
  • something they are (e.g., their fingerprint, facial features or voice patterns)

Note: there are exceptions to the SCA requirement – we’ll deal with those separately in another post. 

So, what’s 3D Secure got to do with this?

Regardless of the PSD2 efforts, the card schemes realised that 3D Secure (3DS) as we have known it, needs improvement. 3DS is an authentication standard supported by most card schemes in the world. Consumers simply didn’t like the 3D Secure 1 experience, especially if they were trying to make a payment on a mobile device. They’d abandon their shopping cart rather than go through an additional layer of security. This resulted in lower conversion rates and lost revenue for businesses, which caused many merchants not to include 3D Secure as part of their checkout flow.  

So the card schemes created a new version of the 3D Secure protocol, with improved authentication methods that seamlessly integrate into the checkout process, in a way that lowers impact on conversion.

The new protocol better supports mobile payments and employs new authentication methods, such as biometrics, supported by today’s smartphones, tablets and computers used by online shoppers. 

With most checking happening behind the scenes and seamless for the shopper, the checkout experience is quicker and smoother. 

And the good news is, 3D Secure 2 is also compliant with the PSD2 requirements for Strong Customer Authentication, so with one solution you can enjoy the benefits of 3D Secure and be compliant with the regulation.

More than just authentication 

So far, we talked about new online payments regulations and what is needed in order to fulfil them. 

Credorax has added these capabilities into the transaction flow. After integration to our Smart 3D Secure solution, you will be able to enjoy a better customer checkout experience and a smart optimisation engine that analyses each transaction in real time to best support your business needs.

In the next post, we will cover what you need to do to make sure you’re fully prepared for PSD2 and the 3D Secure 2 requirements. 

Contact our payment experts for further information on our 3D Secure solution:

My Cashless Experience in Barcelona

In Israel the transition to going cashless has just started to take shape and there’s still a long road ahead. According to ‘Bank of Israel’, the annual cash volume for 2017 was 73 Billion Israeli New Shekels. On the other hand, Europe is leading the world with cashless transactions and because I work for a top European acquiring bank, I had no doubt that when my family and I booked a ticket to see Messi at ‘Camp Nou,’ I would be touching down in Barcelona without a cent to my name.

Being one of the 32 million tourists per year in Barcelona, I was comfortable about landing cashless at the airport and confident about finding our way to the city center. The bus station from the airport to ‘Placa de Catalunya’ has buses leaving every 10 minutes and although paying cash on the bus was an option, we tried to pay by card through the machine, but our American issued card was declined. Luckily, my father had some change and we ended up paying cash which was not the best way to start this cashless experience.

Even though our cashless journey had a disappointing start I found out that there are many ways to pay cashless in the Catalan capital, and it doesn’t all have to be by card. Phones and e-wallets are often used, as well as payment-enabled jewelry (rings and bracelets), such as the Visa and NBG collaboration with Folli Follie. Even the Barcelona founded art, design and music festival, Sónar, went cashless with the SonarCashless wristband.

In bustling cities like Barcelona, speed is essential. Metro and Subway tickets are sold by cash or card through machines, including the busiest stations, making the experience time and cost efficient for the 500 million annually transported passengers. Even my taxi driver preferred getting payed by card and pulled out his wireless credit card machine, making me feel like I’m in the future since this is not common in Israel.

Small payments, for example food, water, or gift shop purchases was the coolest experience for me. It was the first time I used my card’s ‘contactless Tap to Pay’ feature. Since contactless payments do not require a signature or a PIN, I was able to make payments up to 20 euros. Contactless payment transactions have an amount limitation depending on the country and issuing bank of the card.

Another thing to consider about the cashless experience is exchange rates. Since my issuing bank is outside the EU, I nearly ended up paying a lot more because of the exchange rate on the international transactions but, my fiancé discovered that we can save a lot of money by paying all the transactions in USD.

Back in 1661, Sweden was the first European country to introduce paper money, while today the Scandinavian country has almost made the full transition to becoming cashless and is on its way to becoming the first nation to go completely cash-free. Naturally, this should have a positive effect on financial crime rates (tax evasion, money laundering, counterfeiting and corruption). However, ditching cash raises concerns that not everyone is ready for a digital or cashless economy, for example, card fraud causes ten times more damage than counterfeit notes according to Deutsche Bank economist, Heike Mai.

In an increasingly cashless world, Barcelona is amazing and beautiful, the people are nice, and the city is filled with art and culture. Besides the cold weather that I am not used to and some convenient stores that had a minimum amount for swiping cards, my cashless experience was a great success. It’s clear, that as we start to understand that traveling cashless is truly efficient and beneficial and the industry continues to produce tools preventing illegal activities like Fraud and money laundering, paper money will one day be a vague memory of the past.


Credorax helps brands build credibility and customer loyalty through its platform stability, high approval rates, and excellent fraud prevention, generating fewer charge-backs and more profit. Providing the full suite of payment capabilities, Credorax makes payments smart, efficient and easy for merchants big and small.

In the Sales Operations Department I create a tailor-made experience for our new and existing partners with specialized processes. Feel free to leave a comment or contact me if you want to learn more about how we can help. 

The best places to get some sun in January 2019

Got the post holiday blues? Why be blue when you can be sunshine yellow with a spectacular winter-sun destinations?

With our partner, one of Europe’s leading online travel agencies, the hot burning sun is just a flight away! Don’t know where to go? Don’t worry, they’ve got you covered. Check out this amazing list of hot, hot, hot destinations and keep those blues away for good this winter!

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Chargeback disputes: the latest attempt by fraudsters to beat the system – and how to make sure they don’t!

We think of chargebacks as being a modern inconvenience and a feature of commercial dealings. Yet, documents dating as far back as 1800 BCE show that the concept was already in existence in ancient times. To avoid being accused of theft – an offence punishable by death back then – sellers and buyers demanded and carefully preserved receipts and title deeds. If it was proven that the goods (even those purchased in a legitimate sale) were stolen, the buyer had an obligation to return them to the original owner, but also had a right to charge back the seller.

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8 Steps Merchants Are Taking Right Now to Get Through the Holiday Season

‘Tis the season for merchants to focus on holiday sales.

Thanksgiving, Black Friday and Cyber Monday officially open the holiday season. Combined, they have become one of the best shopping periods of the entire calendar year. Originally a US-focused phenomenon, this obsession to ‘find the best deals’ has spread like wildfire across the globe. In recent years, this weekend has become the optimal time for merchants to increase their sales and generate strong profits by offering customers some great deals both in stores and online.

Continue Reading Soars with Agile BI and Reporting

Online travel is a competitive business with tight margins. All the hard work building brand and attracting customers can be thrown off course if users experience problems or transactions don’t go through quickly and consistently.

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Meet our Superwomen, France Blanchard and Lital Bar Noy, nominees for the European Women in Payments Awards 2018!

We are so proud that not one, but two of Credorax’s super women have been shortlisted for the European Women in Payments (EWPN) Awards. France Blanchard, Senior Vice President Business Operations, is up for ‘The Payments Woman of the Year‘ award.

While our Vice President Product,  Lital Bar Noy, is nominated for EWPN’s ‘The Young Innovator’ Award.

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PSPs are Adapting to Cross-Border E-Commerce

This month, Credorax has been spotlighted by PaymentEye to share its wisdom on cross-border ecommerce’s effect on PSPs. Below are a few important takeaways from the article we thought you would enjoy. To read the full article, visit:


Retail Sales, All-Time HighPicture1

Retail sales worldwide are at an all-time high. According to data from eMarketer, total retail sales hit $22 trillion worldwide in 2016, up 6% over 2015. That figure is estimated to exceed $27 trillion by 2020 (excluding travel, event ticket and restaurant sales).

Retail sales are growing too – although the growth rate is predicted to peak at 6.3% in 2017, trending downwards towards the end of the 2010s, the market is expected to deliver strong numbers over the next five years.

Ecommerce Makes up Majority of Growth

Although overall growtPicture2h is slowing in line with the rest of the retail market, ecommerce is predicted to make up an increasingly large proportion of total retail sales.

Accounting for 7.4% of that total in 2015, retail ecommerce sales across all devices will reach $2.3 trillion worldwide in 2017, rising to a whopping $4 trillion by 2020 (representing 14.6% of total retail sales).

This should come as no surprise, as over half of all internet users worldwide – more than 24 percent of the global population – made at least one purchase via a digital channel in 2015.

Cross-Border, Heart of Ecommerce Growth

A growing proportion of this trade is cross-border. As tech advances make it easier for merchants to market to customers beyond their domestic borders, the pressure for merchant acquirers to deliver fast, secure and cost-efficient cross-border payments is higher than ever.

DHL Express reports cross-border sales volumes are predicted to increase at an annual average rate of 25% – from $300 billion to $900 billion – between 2015 and 2020.

PSPs Need to Support Cross-Border for Merchants

PSPs should be able to service the cross-border needs of their merchants if they are to stay competitive. Merchants now expect to pay least-cost routing and local fees for cross-border transactions at minimum. PSPs must have in-depth knowledge of regional preferences and compliance regulations. In addition, merchants expect the lowest costs and transparent pricing models as standard. While an acquirer can’t solve every cross-border issue that arises, selecting the right one can definitely enable their cross-border goals.

Acquirer Checklist: The Essentials Every PSP Should Look For

  • Cross-border reliability: seamless connection of the PSP’s merchants to cross-border
  • Knowledge of cross-border commerce: an understanding of regional preferences, rules, and new regulations.
  • Currency capability: ability to handle multiple currencies and provide the lowest domestic rates for cross-border e- and m-commerce transactions.
  • Multi-device: full cross-channel international sales, enabling merchants to connect and sell to customers on every type of device – especially mobile.
  • Risk protection: ecommerce risk and fraud should be safeguarded against risks, and the latest threats to mobile commerce understood.
  • Flexibility: support a wide range of payment methods and ability to deliver an updated service in response to new market trends.

The cross-border ecommerce market provides a unique opportunity for PSPs to move beyond their traditional roles by providing cross-border options for their merchants, but partnering with the right merchant acquirer must be the first step.

To learn more about selecting the right merchant acquirer, download PSPs: Why Does Your Choice of Acquirer Determine Future Success at here.


Client Advocacy Proves More than a New Year’s Resolution, but a Mantra to Live by

Credorax Customer Advocacy

For many of us, the beginning of a new year is typically a time when we set personal ‘New Year’s Resolutions’.  Just as we do this for ourselves, it is important for businesses to set them as well, in early Q1 each year. Confucius had it right when he professed, “study the past if you would define the future.” The aim is always to look to the future when setting these new expectations, but don’t forget that in order to do so effectively, you have to look to your past to get the true picture of where you are going and where you want to be.

Reflection: Study the Past

Especially after the transformation the Fintech industry went through in 2016 and for its sustainability in 2017, it is important for each of us in this industry – Credorax included – to reflect on the past in terms of what worked and what we could have done better. There is one big lesson we collectively learned. In order for the industry to continue to flourish, it must focus on creating very pragmatic solutions for its audiences (consumers and businesses) vs. frivolous concepts that will never be adopted. In other words, the focus needs to be on the ‘need to have’ rather than the ‘nice to have’ solutions. To do this wisely, companies need to really listen to their customers and react to their needs spot on.

From its inception, Credorax committed itself to being a Merchant Acquiring Bank that would exemplify true Customer Advocacy by staking its claim as the Acquirer to create ‘tailor-made’ business and technology solutions. While standardization in payments is critical for industry growth, the reality in acquiring is that every merchant is different, and therefore each one requires very specific solutions in order to enable them to flourish.

Was this mission an easy one to take on? Absolutely not and anyone in this industry with similar ambitions that claims the opposite is, let’s face it, not being truly transparent. Because here is the deal: off-the-shelf Acquiring & Payment solutions do not answer every customer’s needs and frankly do not exist.

Since we as a company approach everything ‘head-on’ and do not drink the Kool-Aid of unrealistic undertakings, our adopted, transparent philosophy with our clients has become and continues to be: “We may not have the answer today, but we’ll find it quickly and fix it smartly.” We therefore embrace the challenge gladly, understanding that we have the ability to carry out this mission.

The proof of success of this mission? Looking back at our previous year’s accomplishments, which were only made possible because of this commitment!  Global payment service providers and merchants have continuously made it clear that they select Credorax as their preferred merchant acquiring bank over competitors due to this tailor-made approach. Examples of partners secured in the last year alone include: Arvato, Vantiv, Simplify by MasterCard, Acceptacard, Computop and EasyPay. In addition, Credorax recently won several awards, including the Emerging Payments Association’s 2016 ‘Best Gateway/PSP/Acquirer’ solution provider, due to this unique business approach. This award is important to us because it is a concrete example of true measurement against this goal.

Moving Forward: If You Would Know the Future

Circling back to our 2017 Q1 resolution… Customer Advocacy will absolutely continue to be our number one priority to ensure that our customers and partners continue to be successful this year.  Credorax’s business model is solid yet dynamic enough to meet these undertakings once again, as it is built on the following three-pronged paradigm which when combined continuously ensures success for our stakeholders, both internal and external:

  • Trust built on skilled and caring talent: We have built a talent pool of technology and payment professionals that not only excel at their crafts, but care deeply on a personal level about our customers’ successes. Whether it’s waking up in the middle of the night to fix a technical issue, or bringing every C-level to clients in-person to solve their business issues, the staff treats partners and customers like family.
  • All roads lead to a common ground, ePower: In order to support our business philosophy of tailor-made acquiring and payment solutions, we created ePower, our patented single and unified acquiring and payment technology platform. This platform acts as the underlying, centralized infrastructure that serves as a common denominator for all the payment processing needs of all our partners and customers, as well as the foundation on which all tailor-made business/technology solutions are built.
  • Tailor-made technology & business solutions: For every client, we start off with a personalized Solution Architect that maps out a blueprint of how Credorax will support their individual needs and through the duration of the relationship we create and implement these solutions.

Signing off, we can’t stress enough how important it is for every business – not just Credorax –  to make customer advocacy the core focus. Starting off with the right ‘mantra’ at the start of the year will surely lead to success and sustainability throughout the year!

Never forget to get in touch – we need to hear you!

5 Pieces of Advice for Merchant Onboarding Application


To date, the merchant onboarding process to an acquirer has been time-consuming, inflexible and costly. The biggest cause of delays and frustration is the overwhelming amount paperwork that needs to be completed.

As an acquirer dedicated to customer advocacy and operational efficiency, we decided to share with you, our merchants and partners, how putting together a merchant application properly for the acquiring bank can save time and headaches. The result should be an application that is successfully processed and approved by acquirer in a timely manner.

As a merchant, you need to know that it is critical for your business to follow local laws and regulations. It is highly recommended that you include all business-related licenses as a part of your application. Note that some types of products are subject to more regulation than others, therefore the set of documents might vary by country and industry.

No less important is to ensure that you include all the detailed information about your business to further speed up the application. For example, with regards to the company name, fill in the full legal name, including the type of business entity it is (e.g., a limited company – Ltd.).

With the above in mind, here are our top five tips for filing in an approval-winning merchant onboarding application:

TIP 1: Be clear about your business model.
Provide all the relevant up-to-date information up front, to avoid assumptions and requests for additional information from the acquirer. If your website is under construction or still in beta, let the acquiring bank have access to your business plan and/or a beta version of your website.

TIP 2: Emphasize risk mitigation procedures and policies.
Present your internal AML and fraud policies together with other risk mitigation procedures to the acquiring bank. Merchants having proper risk processes in place score more points with the acquirer and might be considered for lower collateral requirements.

TIP 3: Highlight cardholder and affiliate KYC checks.
Existing cardholder and KYC check procedures should be highlighted at the onboarding stage. Sound KYC checks on both cardholders and affiliates leave less room for fraudulent transactions.

TIP 4: Present transaction monitoring solutions.
There are third-party services that keep tabs on transactions for any issues, analyze transactions to determine risk exposure, and manage fraud and chargebacks in relation to the acquirer and card scheme thresholds. Great merchants account for these potential issues and have plans in place to manage them.

TIP 5: Provide clear explanation of service fulfillment period.
Merchants that offer more than one service may have more than one fulfillment period and anticipate a division in expected volumes. A detailed explanation of these fulfillment periods to the acquiring bank will help ease the onboarding process.

Let us know if you have any other tips on how to speed up this process. Contact us at