Transaction Risk Analysis Exemption

Transaction Risk Analysis Exemption (TRA) is a provision within the regulatory framework, particularly associated with the European Union’s Revised Payment Services Directive (PSD2). This exemption allows for a more streamlined authentication process during electronic payment transactions, specifically when the transaction is deemed low risk. TRA relies on risk-based analysis, considering factors such as transaction amount, frequency, and historical behavior to determine the necessity of Strong Customer Authentication (SCA).

Transactions qualifying for the TRA exemption can proceed with reduced friction, enhancing the user experience by eliminating the need for additional authentication steps. However, businesses and payment service providers must implement robust risk analysis mechanisms to accurately assess transaction risk and ensure compliance with regulatory requirements.