Nov 21, 2020

SCA is coming, and European merchants must be prepared

Cyber Security
digital payments
James Pinborough, SCA Product ...
3 min
James Pinborough, SCA Product Manager, Accertify explores the implications of lost sales as the EEC deadline for Strong Customer Authentication looms
James Pinborough, SCA Product Manager, Accertify explores the of lost sales as the EEC deadline for Strong Customer Authentication looms...

This year we’ve seen an unprecedented shift in shopping habits. The COVID-19 pandemic led to a number of European governments instituting stay-at-home orders, and this meant many merchants needed to shift their business model, close temporarily, or accommodate an upshift in ecommerce sales as consumers increasingly shopped online. 

To further complicate matters, regulation from the European Banking Authority comes into enforcement at the end of the year on 31 December 2020. The regulation, which is called Strong Customer Authentication (SCA), requires merchants to implement a 2-Factor Authentication (2FA) solution in order to authenticate payments. The scope of SCA is limited to cards issued within the European Economic Area and there are exemptions available. The 3DS2 industry standard was created to enhance the security of payments by providing the issuer with the option to authenticate the cardholder prior to authorisation. However, as a minimum all ecommerce merchants based in the EEA should implement 3DS in order to implement SCA. 

If a merchant does not employ SCA, they run the risk of a significant number of sales being declined by the respective card issuers. 

Merchants should not only implement 3DS, they should also implement an SCA optimisation tool. This enables the merchant to maximise all the available exemptions and scope criteria, in order to ensure as many sales as possible are processed with no friction. Identifying those payments which are out-of-scope or exempt can help the merchant to provide a smoother customer experience. 

We have heard in conversations with clients and prospects that many businesses are not ready for the looming SCA deadline, or that they do not understand the responsibilities of the merchant in deploying SCA. If merchants are unprepared, they will absorb the impact of a potentially significant increase in declined sales arising from sales where the customer has not been authenticated or where this is no exemption request. 

All is not lost though: there is still time for merchants to prepare for the enforcement deadline. Ideally merchants should have their solution in place well in advance of their country compliance date, in order to make sure everything is running smoothly. Merchants should be aware of the roll-out plan for their country, which may include managed roll-out periods where an increasing percentage of non-compliant transactions could possibly be declined in the lead up to the enforcement date. Each merchant should analyse their transaction profile to understand which payments are in-scope vs out-of-scope, and which qualify for exemptions. They ought to then reach out to vendors to understand which solution best fits their transaction profile and resourcing. 

Some merchants may find that SCA has little or no impact on them due to their sales being out-of-scope. In addition, they may find that a lot of their sales qualify for an exemption based on the value. Some may determine that given their transaction profile they should request 3DS on every sale. There is no one-size-fits-all solution. Each merchant needs to identify the approach and solution that best suits them and their customers, within the bounds of SCA requirements. 

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Jun 22, 2021

Payment startup Mollie raises US$800m at a $6.5bn valuation

3 min
A new funding round values Mollie at US$6.5bn making Mollie the third most valuable privately-held European fintech behind Klarna and

Mollie, one of the fastest-growing payment processors within Europe, today announced it has raised US$800m in a Series C funding round, now valuing the company at $6.5bn. The valuation, based on Dealroom data, makes Mollie the third most valuable privately-held European fintech behind Klarna and

Blackstone Growth (BXG), Blackstone’s growth equity investing business, led the investment and included participation from EQT Growth, General Atlantic, HMI Capital and Alkeon Capital. TCV who led the Series B investment in September 2020 also participated in the funding round. 

According to the company, the funding will fuel Mollie’s international expansion, team scaling, and continued investment in product and engineering.

“There’s something very special about Mollie. In the three months since I joined the team we’ve achieved so much: making preparations for a full launch in the UK, driving 600% growth in Germany and hiring an impressive set of team members and executives,” said Shane Happach, CEO, Mollie. “Over the past months, Mollie has been receiving a remarkable amount of interest from some of the world’s foremost fintech investors. In bringing on BXG, we believe we have an investor who can help Mollie in our next phase of growth. The involvement of our new group of investors demonstrates confidence in Mollie’s growth, strategy and product set.”

The Amsterdam-based business was launched in 2004, and is one of the largest PSPs in Europe. Today, it serves more than 120,000 monthly active merchants of all sizes across the continent. During 2020, Mollie processed more than 10 billion Euros in transactions and is on track to handle more than 20 billion Euros during 2021. 

“Mollie is one of Europe’s most exciting high-growth businesses and is at the forefront of enabling next-generation payments for online SMEs across Europe. We are excited to partner with Mollie’s fantastic team and look forward to leveraging Blackstone’s capital, expertise and global network to unlock the company’s next phase of growth,” said Paul Morrissey, who leads European investing for Blackstone Growth. “This investment underlines Blackstone’s confidence in Europe as a place for high-growth companies to thrive.”


In Europe, FinTech app usage grew by 72% directly after the pandemic outbreak, while the top seven digital banks in the US grew their cumulative user base by 39% throughout the year. Competition in payments has grown over the past few years with fintech players like Stripe, Square and Netherlands-based Adyen all competing for a bigger share of the market.

Unlike its American rivals, Mollie says it mainly focuses on transactions with small businesses in Europe. Shane Happach, CEO of Mollie said: “A lot of the bigger players in online payments come out of the US, like PayPal,”. Adding that even Visa and Mastercard are US companies.

“A lot of investors don’t have a bet on Europe,” Happach said. “Mollie’s one of those unique assets that offers exposure.

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