SCA and PSD2 compliance hurts Singapore business conversion rates: report

67% of affected businesses reported a decline in conversion rates by 11-20%.

More than half (57%) of businesses in Singapore believe that strong customer authentication (SCA) and the Payment Services Directive 2 (PSD2) have negatively impacted their conversion rates.

In its survey, Adyen said the impact varies, with 67% of affected businesses reporting a decline in conversion rates by 11-20%, and 18% experiencing a more significant drop of 21-30%, whilst only 0.35% noted declines exceeding 31% or more.

In addition to the challenges posed by SCA and PSD2, businesses are grappling with a rising tide of fraud attempts. Over the past year, 52% of Singaporean businesses have reported an increase in fraudulent activities targeting their organisations.

Many businesses acknowledge that fraudulent attacks tend to spike during peak shopping seasons, with 60% agreeing that these periods pose a higher risk.

To counter these threats, 66% of businesses are considering partnerships with technology or payments providers that offer chargeback liability guarantees, whilst 62% have adopted AI-based solutions to help prevent fraudulent transactions within their stores.

Singaporean businesses are also rapidly embracing online marketplaces, with 63% now engaging in e-commerce, and certain sectors leading the way. The consumer electronics and appliances industry reports the highest proportion of online sales at 77%, followed by luxury fashion and products at 70%.

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