MacDonald, 21, from Edinburgh and a member of the Craigielaw club, had been very much the underdog against the 17-year-old Troon Ladies player. Jaffrey, making her debut in the event, was the leading qualifier and beat Curtis Cup debutante Eilidh Briggs (Kilmacolm) in the semi-finals. MacDonald, who defeated Briggs' older sister Megan in the last four, came through 10th among the 32 qualifiers.
However, MacDonald was two-up after nine holes, having shaken off a potentially demoralising double-bogey six at the first to birdie the third, eighth and ninth.
Jaffrey, runner-up in the Helen Holm Scottish Stroke Play at Troon last month, hit back to win the 10th, 11th and 12th, the latter two with birdies, to take a one-hole lead.
MacDonald, who said afterwards that she never at any time felt under real pressure, squared the contest with a pitch-and-putt par 4 at the 13th and then birdied the 16th with a pitching wedge approach and an 8ft putt to go one up.
Jaffrey, who enrols at Kansas State University in August, birdied the 17th to draw level again.
With the tension mounting, MacDonald, showed nerves of steel to hole a 5ft putt at the 18th for a half.
Banishing memories of her double bogey at the opening holef our hours earlier, MacDonald produced a cast-iron level-par four while Jaffrey carded a bogey five having had to pitch over a bunker after missing the green with her approach.
"I just ran out of shots," Jaffrey said. "I'm a little bit down, having had such a great week and then not being able to finish it off with a win but I'll get over it."
MacDonald said: "I was always comfortable and just tried to play my own game, hit the fairways, stay out of trouble and keep hitting greens.
"I enjoyed it immensely but I feel a little bit sorry for Connie, who has had an outstanding week. At 17 she is a great prospect for Scottish ladies' golf to have."
Next year's event will be played at Monifieth.