If you’re on this website you’re probably an e-commerce owner and already aware that on 14 September 2019, new requirements for authenticating online payments will be introduced in Europe as part of the second Payment Services Directive (PSD2).
Banks will decline payments that require Strong Customer Authentication (SCA) and don’t meet these criteria. You can read the original SCA requirements from the Regulatory Technical Standards or RTS here.
What does all this mean for an e-commerce owner?
The frustration is obvious for most online businesses, adding yet more friction to the checkout process is not good for any online retailer who is well aware the end result will be a drop in conversions and sales.
From September 14, 2019 all non-compliant transactions will be declined by the cardholder’s bank. Extra friction will be caused by customers’ having to double authenticate all transactions, this will create a negative impact on your existing checkout conversion rate.
Conversions will drop steeply if your payment process is causing extra friction or even worse, you won’t be able to make any sales at all if upgrades are not made to your checkout.
From this date, every time a consumer buys something online that costs over €30, simply adding their details once will no longer be enough. Instead, they’ll need to additionally confirm their identity by something they know (a PIN or password), something they have (such as a smartphone), or something they are (biometric facial features or a fingerprint).
This is known as two-factor authentication (2FA) which you may have encountered before – for example when a six-digit pin is sent to your mobile to input on a website.