A new study has revealed that European consumers are largely unaware of a new EU regulation which will add new security measures for online payments.
The Payment Services Directive 2 (PSD2) went into full effect on 14 September 2019 but the European Banking Authority extended the compliance deadline for companies to implement strong customer authentication for ecommerce card-based payments until 31 December 2020. The regulation will require multi-factor authentication such as codes sent via SMS to conduct purchases over €30.
The report from Riskified, surveying 2000 consumers and 200 retailers across Europe, found vast disparities between retailer and consumer awareness of the regulation.
Eighty-eight percent of European retailers believe consumers are aware of the regulation but 76% of consumers said they are unaware of it.
In a potentially worrying development, 32% of European consumers said they would rather cancel online purchases and go elsewhere than go through some of the more stringent verification measures. However, 22% of retailers had yet to take any steps to minimise the negative impact of PSD2 on revenues.
Eido Gal, CEO at Riskified, said: “Fraud is a major concern in eCommerce. We’re always in favour of better security, but it shouldn’t have to be a tradeoff with the customer experience. Unfortunately, some of PSD2’s security requirements could have a detrimental effect on online shopping, leading to unhappy customers and cart abandonment.
“As these results show, anything that interferes with the online checkout process puts merchants at risk of losing customers and revenue. As PSD2 comes into effect, merchants should do everything they can to continue to provide excellent customer experience, while keeping transactions secured and fraud levels as low as possible.”
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