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\"EBA Q&A 2018_4034 — Q&A — Criteria for the application of the transaction risk [Final Q&A]\"\nshortTitle: \"EBA Q&A 2018_4034 — Q&A — Criteria for the application of the transaction risk [Final Q&A]\"\nanswer_id: EBA_QA_2018_4034\nstatus: \"Final Q&A\"\ntype: qa\ninstrument_type: qa\nauthority: EBA\nbinding: false\nbinding_character: non_binding\nlegal_status: in_force\nregulation: \"PSD2\"\npsd2_level3: true\nmica_level2: false\nlegal_basis: \"Article 97 PSD2\"\ndate: 11 October 2019\nsource_link: https://www.eba.europa.eu/single-rule-book-qa/qna/view/publicId/2018_4034\nlifecycle: \"Final Q&A\"\ntext_version: \"EBA Q&A register, 11 October 2019\"\nsource_url: \"https://www.eba.europa.eu/single-rule-book-qa/qna/view/publicId/2018_4034\"\ncheck_status: matched\nverified: true\nlast_checked: 2026-10-26\nchecked_against: \"the EBA publication\"\nsource:\n  prepared_by: \"EBA\"\n  published_by: \"EBA\"\n  published_in: \"EBA Single Rulebook Q&A tool\"\n  evidence:\n    prepared_by: \"Answer prepared by the EBA.\"\n    locator: \"EBA Q&A register entry 2018_4034, field 'Answer prepared by'\"\ndocument_type: \"qa_answer\"\nlegal_nature: \"not_legislation\"\naddressees: \"not stated in the document\"\ndates:\n  published_on: \"2019-10-11\"\n  question_submitted_on: \"2018-06-28\"\n  locators:\n    published_on: \"EBA Q&A register entry 2018_4034, field 'Final publishing date'\"\n    question_submitted_on: \"EBA Q&A register entry 2018_4034, field 'Submission date'\"\nlifecycle_label: \"Final Q&A\"\n---\n\n**Answer by the EBA, published in its Q&A tool · not legislation · published 11 Oct 2019 [Final Q&A]**\n\n*Final Q&A · EBA Q&A register, 11 October 2019 · Checked against the EBA publication on 26 Oct 2026 · [Official source](https://www.eba.europa.eu/single-rule-book-qa/qna/view/publicId/2018_4034)*\n\n| | |\n|---|---|\n| **Full title** | EBA Q&A 2018_4034 — Q&A — Criteria for the application of the transaction risk \\[Final Q&A\\] |\n| **Prepared by** | EBA |\n| **Published by** | EBA, in the EBA Single Rulebook Q&A tool |\n| **Reference** | EBA_QA_2018_4034 |\n| **Document type** | Q&A |\n| **Legal nature** | Not legislation |\n| **Addressees** | Not stated in the document |\n| **Dates** | Published 11 October 2019; question submitted 28 June 2018 |\n| **Legal basis** | Article 97 PSD2 |\n| **Related instruments** | None recorded |\n| **Text on this page** | Word for word — the full text of the EBA publication |\n\n**Criteria for the application of the transaction risk analysis (TRA) exemption – Relevant fraud rates**\n\n### Question\n\nIs only the Payment Service Provider (PSP) applying the TRA exemption required to have a fraud level below the reference fraud rate?\n\n### Background\n\nEach PSP can apply the TRA exemption on the basis of its own fraud rates, regardless of the fraud rates of the other PSPs involved in the transaction.\n\nThis is because, for example, the issuer is not expected to know the acquirer’s fraud rates. The RTS do not provide that national competent authorities and/or schemes share fraud rates of each issuer and acquirer.\n\n***\n\n### Answer\n\nYes, only the payment service provider (PSP) wishing to apply the transaction risk analysis (TRA) exemption should have fraud level below the reference fraud rates specified in the table set out in the Annex to the Commission Delegated Regulation (EU) 2018/389.\n\nIn accordance with Article 18(1) of the Delegated Regulation, a PSP may apply the exemption if a given transaction is identified “as posing a low level of risk”. Further, in accordance with Article 19 of this Delegated Regulation, the PSP shall ensure that its overall fraud rate shall be “equivalent to, or lower than, the reference fraud rate for the same type of payment transaction”.\n\nIn the case where the fraud level of the issuer is below the reference fraud rate but the acquirer’s fraud rate is above, only the issuer would decide whether to apply the TRA exemption or not.\n\nIn the case where the fraud level of the acquirer is below the reference fraud rate but the issuer’s fraud rate is above, the acquirer can decide whether to apply the TRA exemption or not. However, in line with the clarifications provided in table 2 “Summary table on who may apply an exemption” of the EBA Opinion on the implementation of the RTS on Strong customer authentication and secure communication (EBA-Op-2018-04), the payer’s PSP always makes the ultimate decision on whether or not to accept or apply an exemption. This means that the payer’s PSP (the issuer) may accept the TRA exemption to be applied by the acquirer. However, in the event that the issuer would not accept the TRA exemption to be applied by the acquirer and wishes to apply strong customer authentication (SCA), the issuer would either apply SCA to the transaction or decline the transaction if it was not technically feasible to apply SCA.\n\nQ&A 2018\\_4042 provides additional information on how the liability requirements under Article 74(2) of PSD2 would apply in the cases described above.\n\n***\n\n**Source:** [EBA original document](https://www.eba.europa.eu/single-rule-book-qa/qna/view/publicId/2018_4034)\n\n## Related Level 1 articles\n\n- [Article 97 — Authentication](../../../articles/97.md)\n"}