The state of payments authentication, regulation and compliance around the world

The Global Payments Report 2025 by Ravelin offers a comprehensive overview of the evolving regulatory landscape in payments, highlighting significant developments in authentication, compliance, and fraud prevention worldwide.

The report emphasises the global drive toward secure customer authentication (SCA) mandates, largely influenced by regulatory frameworks like Europe’s PSD2 and the upcoming PSD3.

With SCA mandates in place across various regions, including Europe and some APAC countries, the report examines the regional approaches that shape compliance and security strategies.

For instance, PSD2 in the EU has been pivotal in reinforcing SCA for online transactions, a move which not only improves consumer protection but also sets standards that other markets look to emulate.

PSD3, expected to bring further alignment and Open Banking enhancements, is anticipated to impact the European payments landscape substantially.

Authentication Advances and Frictionless Payments

New iterations of the 3D Secure protocol, such as 3DS 2.2 and 2.3, aim to streamline the authentication process.

These versions introduce user-friendly elements like frictionless authentication and biometric options, making them favourable in markets that prioritise seamless transactions.

However, frictionless rates, such as those observed in the US, remain inconsistent.

Ravelin suggests that cultural differences play a significant role in the adoption of these measures, noting that US consumers favour low-friction experiences, making the enforcement of European-style regulations challenging.

Nevertheless, card schemes like Visa are actively pushing for 3DS adoption across markets, signalling a potential shift.

Regional Regulatory Dynamics

Countries like Australia have adopted frameworks similar to PSD2, implementing the CNP Fraud Mitigation Framework, which mandates SCA for merchants with high fraud rates.

Japan and India, on the other hand, have taken unique approaches, with Japan utilising local card scheme JCB’s infrastructure and India’s UID-based authentication system.

These localised solutions demonstrate a move toward tailored approaches that respect regional payment habits while addressing global security concerns.

The report highlights the complexities and challenges in implementing uniform payment regulations globally.

Merchants are advised to collaborate with authentication providers, embrace multi-provider solutions, and adapt to regional standards to minimise friction and maximise compliance.

 

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