Europe may lose €57bn in economic activity in the first 12 months following the implementation of Strong Customer Authentication (SCA) this September.

The study, carried out by 451 Research for Stripe, surveyed 500 payment professionals at online businesses. Furthermore, it also surveyed 1,000 consumers in the UK, France, Germany, the Netherlands and Spain.

A requirement under PSD2, SCA calls for multi-factor authentication in electronic payments.

With its implementation deadline fast approaching, most of the businesses were found still unprepared for SCA.

Only 40% of the surveyed businesses were found prepared for SCA. Furthermore, 44% cited plans to become SCA ready on the date of the rule’s enforcement.

SCA awareness was found to be more among larger merchants compared to smaller ones.

Three in five businesses with staff headcount of below 100 were found either unfamiliar with SCA or unsure regarding their readiness.

In case of merchants having more than 5,000 staff, one in 25 payment professionals were found unaware about the same.

According to the study, businesses are underestimating the complexity of SCA compliance tools. Half of the respondents are planning in-house management of exemptions.

Besides, one in four online businesses are still unfamiliar with 3D Secure’s recent version. This is touted as a SCA-compliant way to accept online payments.

In addition, the study predicts that SCA will increase low consumer tolerance for bad checkouts, in turn increasing cart abandonment.

451 Research analyst Jordan McKee said: “SCA is unequivocally the single most disruptive event to impact European digital commerce, and many businesses—especially smaller ones—have yet to fully grasp its extensive impact.

“Our study indicates low levels of preparedness and, most troublingly, a lack of appreciation for how SCA will transform how European consumers will buy online.”