Is Credentials/Card on file (COF) part of the exclusion/exemptions list?
COF in a nutshell: Customer initiates a first transaction with a merchant with a 3D-S (CIT). From this first transaction experience, the merchant has the possibility to do recurring transactions (subscription or with customer approval -> tokenization), flagged as MIT transactions.
MIT are one of the exemptions foreseen within the 3DSv2., if they fulfill the following cumulative conditions:
- subsequent transactions of an initial CIT
- CIT was done with a mandatory authentication
- A dynamic ID linking is made between initial CIT and the subsequent MITs
After initial authentication, exemptions/exclusions can apply:
- Either because of legal recurring exemptions which apply to subscriptions with a fixed amount and periodicity (merchants are indeed advised to authenticate for full amount + provide details about number of agreed payments with card holders)
- Either because other type of transactions are excluded from SCA scope... at merchant sole risk in case of chargeback (protection limited to authenticated amount) AND need for issuer to accept that risk to be taken:
- Unscheduled COF: principle of subsequent transactions is agreed with card holder, but amount and/or periodicity is not fixed
- Industry practices: incremental, no show, etc...
For the transitional period, schemes have defined default ID to be used for subsequent MITs created before introduction of 3DS v2.