What are the TRA exemption thresholds?
Transaction risk analysis lets a PSP skip SCA when its card fraud rate stays under 0.13% for payments up to EUR 100, 0.06% up to EUR 250, and 0.01% up to EUR 500. The EBA has confirmed the rate is calculated per transaction type, not per band, so a PSP at 0.10% can only exempt payments up to EUR 100.
In detail
Transaction risk analysis lets a PSP skip SCA when its card fraud rate stays under 0.13% for payments up to EUR 100, 0.06% up to EUR 250, and 0.01% up to EUR 500. The EBA has confirmed the rate is calculated per transaction type, not per band, so a PSP at 0.10% can only exempt payments up to EUR 100.
How TRA works
Under Article 18 of the RTS, the acquirer or issuer may exempt a payment if its fraud rate stays under a reference rate for the amount band. For cards, the annex sets 0.13% up to EUR 100, 0.06% up to EUR 250 and 0.01% up to EUR 500. The EBA has confirmed that the rate is calculated per transaction type, not per band: a PSP at 0.10% can only exempt payments up to EUR 100. Two consecutive quarters above the reference rate and the exemption is lost for that band.
Keeping the exemption
An acquirer’s TRA fraud rate is calculated on everything it processes. One sub-merchant with a card-testing problem can push the whole portfolio over 0.06% and kill the EUR 250 band for every other merchant. Since TRA depends on the acquirer’s fraud rate, the routing rule must know which acquirer the transaction will go to, and regulators can ask for the quarterly fraud-rate calculation behind each TRA exemption.
More detail in our #PayDecoding episode on 3-D Secure.