Earlier quoted context omitted.
I think the FIDO Alliance is already discussing solutions to these use cases. (And also this is a bit circular reasoning, isn’t it? “Why don’t you use the XYZ standard? Because it does not support our use case. So why don’t you cooperate on adding support to the standard? Why? So that you can use the XYZ standard!”) Also, I think there already are extensions supporting some basic forms of this, however, they are not…
Which requirement of PSD2 do you think is so stringent? I have three bank accounts here: One of them (my good bank) has a chiclet keypad physical authenticator which needs these manual codes entering to get a value back that proves I used the authenticator. The large European bank that handles my salary and so on, relies on SMS entirely, I ask to perform a transaction, they send an SMS with a code, I type it into a b…
SMS authentication is... well by one reading of PSD2, it's not acceptable. But in real world, it is basically necessary, and not _that_ insecure (if you ignore SIM swapping attacks etc.). The WYSIWYS aspect comes not from the code but from the message text, which is crucial (and per PSD2, should include at least the amount and... receiver? I forgot). But sure, if people don't read or understand the message, it's not ideal...
While FIDO provides better phishing resistance (than SMS, not necessarily than authentication apps), it doesn't protect against transaction modification (e.g. man in the browser) and for people who care about and understand security, it is strictly worse.