Merchants, Banks and Payment Providers Must Educate Consumers Now About PSD2 Fraud Rules: Report

Merchants, Banks and Payment Providers Must Educate Consumers Now About PSD2 Fraud Rules: Report

February 7, 2019

In a recently conducted survey of 500 consumers across the U.K., Sweden, Germany and Spain, data analytics firm FICO found that changes to authentication requirements could be problematic for consumers. While many adults in each country reported they are aware that regulations will change, between one-fifth and one-third of adults in the EU don’t know about the revised payment service directive (PSD2) project.

“This is important, as when customers are not expecting change and don’t understand the reasons for it, they are likely to be more resistant to it and dissatisfied by it,” FICO wrote in a January 30 blog post.

The impending changes will require banks, card issuers and payment service providers to implement strong customer authentication (SCA) as of September 2019. While those in the industry have long known about PSD2, consumers have remained largely in the dark about the decisions that will impact their online customer experiences.

At issue, PSPs will be required to add additional authentication features despite many consumers believing that there are already enough security checks in place. According to the survey, half of the respondents in Spain and Sweden said that the current security checks in place are sufficient. In addition, 53 percent of Germans and more than 70 percent of adults in the U.K. believe card payments have enough security checks in place.

As a result, “Customer experience rather than mere compliance could be the true battleground for PSD2, those payment service providers (PSPs) that get it right will have happier customers, better Net Promoter Scores and ultimately will attract and keep more customers,” FICO said.

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Kacy Zurkus