By Ekata

The revised Payment Services Directive (PSD2) went into effect this past January 1st for many countries across Europe. The payments ecosystem has been hard at work for the past year setting up their compliance for the new regulation. Now that the time has come to see the interactions play out, we wanted to investigate the merchant experience in the first months of 2021.

For merchants generally transacting in real-world goods, the online channel was a small subset of their total revenue. Once Covid-19 hit and all the shopping behaviours of 2020 impacted their business, most merchants became digital-first by necessity. This also means that understanding digital risk, fraud and PSD2 has happened incredibly fast for most companies.

THE OPPORTUNITY TO LEAD IN CUSTOMER EXPERIENCE AND TRUST

PSD2 Strong Customer Authentication (SCA) provides rich opportunities for everyone in the payments ecosystem to strategise and win long-term:

• Issuers want to stay “front of wallet”. Thus, it’s in their best interest to focus specifically on the customer experience and reduce any friction experienced by the consumer that could lead to an abandoned transaction.
• Acquirers/PSPs want to develop new fraud capabilities (real-time fraud checks, Transaction Risk Analysis (TRA) etc.) and differentiate against an increasingly commoditised space.
• Merchants want to increase conversion and do so by building frictionless experiences that keep the consumer returning to make additional purchases.
• Everyone wants increased authorisation rates because, ultimately, this key business signal is tied to the bottom line.

THE SURVEY

Ekata and Allyiz  (formerly STRATGranat) interviewed top global merchants on their experiences in the first months of 2021 to understand their strategy around PSD2, and learn how they are actively monitoring and assessing SCA performance to drive better customer experience and trust.

Of these merchants, 90% were truly global and 10% were spanning various European countries. In order to ensure good SCA knowledge, we focused on people in Payments roles.

You can access our full study here to understand what these global merchants are seeing in the market – the ultimate temperature check on all the effort undertaken by the various payments players in the ecosystem.