We are hearing a lot more about PSD2 in recent weeks, but what is it and how will it impact ecommerce?
What is it ?
The PSD2 directive is expected to be a real game changer for the banking industry and it will make way for increased competition within the sector and as a result should bring about improvements to the customer experience. In simple terms it will allow bank customers to give third-party providers access to retrieve their account data from their banks and use it to initiate payments directly from their bank accounts.
How will it affect ecommerce?
Key to the implementation of PSD2 is Strong Customer Authentication (SCA). To accept payments once SCA goes into effect, additional authentication will need to be built into the payment process.
SCA requires payments to be authenticated using at least two of the following three elements:
1) Something the Customer Knows (e.g., password or PIN)
2) Something the Customer Has (e.g., phone or hardware token or other device)
3) Something the Customer Is (e.g., fingerprint or face recognition)
The primary way ecommerce businesses will meet these authentication requirements is through 3D Secure 2.0 (3DS 2.0). 3D Secure 2 is a new version of the authentication protocol.
It has been developed with the goal of improving the overall performance of the 3DSecure program and supports the payments industry in delivering a consistent, and frictionless, user experience across all e-commerce channels and connected devices.
At abcommerce we are actively working with our payment provider partners, AIB MS(Authipay) and Global Payments (Realex) preparing for the directive.
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