Low-Value Transaction

Low-Value Transactions refer to purchases that involve a relatively small dollar amount. Under PSD2 regulations, low-value transactions may qualify for an exemption from Strong Customer Authentication (SCA) requirements during checkout. The maximum threshold to be considered low-value is established by the card issuer or payment service provider, typically around EUR 30 for online transactions in Europe.

SCA exemption criteria:

• Transaction amount: Low-value transactions typically fall under the EUR 30 threshold, exempting them from SCA requirements. This exemption aims to minimize the burden of authentication for small, everyday payments.
• Cumulative payments: In addition to individual transaction amounts, cumulative payments within a specified period may also trigger SCA enforcement. For instance, if cumulative payments on the same card exceed EUR 100 within a timeframe, SCA is required for subsequent transactions.
• Transaction frequency: SCA may also be triggered based on the frequency of transactions. If low-value transactions occur at a rapid pace, the issuing bank may implement SCA to safeguard against potential fraudulent activities.

Low-value transactions are one of the fastest-growing segments in the financial industry. For the global economy, advances in low-value transactions will be a major facilitator of easier trade in goods and services.