Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Payments down 20% in my SaaS after EU introduced PSD2

globalbankingandfinance.com

Post reply on HN
Print view View original

21–30 of 121 posts

Re: Payments down 20% in my SaaS after EU introduced PSD2

#21

Post by jeroenhd »

vineyardmike wrote: post #7

Very interesting to hear about the impact of this regulation on industries many here work in but I have many questions that were answered… What is PSD2? What is 3DS? Why do these exist and what did they solve? Edit: Thanks for the responses everyone!

PSD2 is an initiative/set of laws that force banks to have some kind of API available to trusted parties so other companies can access customers' financial data (with explicit consent by the user, of course). This allows the banking app from bank A to work with the bank account of bank B, if bank A implements bank B's API. It also includes some other stuff, like adding security requirements to online payments, like the 3DS system is doing.

Companies that make use of these APIs need to fulfil some requirements so that not just any shitty company can ruin your life by hiring shit developers that accidentally add zeroes to the amount of your transactions.

3DS probably refers to "3D secure", a way to secure credit card payments online. I don't use a credit card for anything but paying for American services so I don't know the details of it, but it seems to be a way to redirect credit card users to the checkout page of their bank so that extra security (like 2FA) can be added to online payments.

Re: Payments down 20% in my SaaS after EU introduced PSD2

#22

Post by hocuspocus »

So, some VP at a fraud prevention company recommends merchants to avoid using 3DS and use a fraud detection platform, got it.

I don't know if we can find better data somewhere else but I would assume that abandonment rates will decrease thanks to PSD2:

- SMS tokens are finally on their way out; more and more people are installing their bank's mobile app, which is used as the second factor (you get a push notification, you have to unlock and accept the transaction).

- We'll see some harmonization across EU/EEA merchants. No more cases of "the German website doesn't trigger 3DS but the French one does".

Re: Payments down 20% in my SaaS after EU introduced PSD2

#23

Post by unilynx »

How many of these 3DS failures switch to an alternative payment method?

A drop in EU e-commerce sales between 20% and 50% would be big news we wouldn't have missed, so where are these sales going ? Or are these transactions still a tiny bit of the overall e-commerce value? If users opt for a cheaper (and not easily clawed back) payment method because they can't complete the 3DS challenge, the merchants may still win.

Re: Payments down 20% in my SaaS after EU introduced PSD2

#24

Post by codethief »

I absolutely hate 3DS, for two reasons:

1) I now have to do the 3DS procedure for amounts as small as 1,80€

2) My bank's 3DS "website" requires me to enter my online banking PIN (the one for my entire account, not just my credit card PIN!) and since that website gets opened in an Android WebView I can't even be sure that the app invoking the WebView doesn't actually obtain my PIN through a key logger. Fantastic.

Re: Payments down 20% in my SaaS after EU introduced PSD2

#25

Post by RicoElectrico »

Meanwhile in Poland I use BLIK [1]. Simple and reasonably secure, the downside being no chargeback facility.

The bonus is that Przelewy24 is often presented as a payment option in global shops like Steam or AliExpress, so I can use it there as well.

[1] https://blik.com/en

Re: Payments down 20% in my SaaS after EU introduced PSD2

#26

Post by Jolter »

codethief wrote: post #24

I absolutely hate 3DS, for two reasons: 1) I now have to do the 3DS procedure for amounts as small as 1,80€ 2) My bank's 3DS "website" requires me to enter my online banking PIN (the one for my entire account, not just my credit card PIN!) and since that website gets opened in an Android WebView I can't even be sure that the app invoking the WebView doesn't actually obtain my PIN through a key logger. Fantastic.

Does your bank not have a phone app? Consider switching to one that has.

Re: Payments down 20% in my SaaS after EU introduced PSD2

#27

Post by globile »

We developed an internal 3DS attempt strategy to try to remedy this [0], but it is not ideal.

Basically, try 3DS (with no authentication), then try regular charge (NON 3DS), then if all else fails try a full 3DS charge. You'd be surprised by the disparity, especially internationally, and we do recoup some charges at the expense of triggering some unintended blockage.

When asking our provider (Stripe in our case) about the best strategy for this, it always comes down to , "Let SCA (Strong Customer Auth) rules and logic handle everything", but this simply doesn't work well.

I really wish the likes of Adyen, Stripe, etc...would help out with better decline ratio strategies.

I think we are all plagued by "do_not_honor" and "transaction_not_allowed" codes that do little to move us in any direction...

[0] https://medium.com/@globile/using-stripe-to-sell-internation...

EDIT: Fixed the order of actions...

Re: Payments down 20% in my SaaS after EU introduced PSD2

#28

Post by ojagodzinski »

In Poland we have something called "Blik" (https://en.wikipedia.org/wiki/Blik) state of the art internet payment system. https://blik.com/en Sadly it has to be supported by bank (to be specific their mobile app) so not usable by all EU customers. But since it is also operated by banks (they share cost of IT infrastructure) commission is much lower than Visa/MasterCard and milion times easier to use.

In 2020 Blik had 7 million users and processed 424 million transactions. In 2019, the number of Blik transactions exceeded the number of transactions made on the Polish Internet with payment cards.

In PSD2/3DS world paying with card is real pain in the ass, only advantage is transaction insurance and chargeback.

Re: Payments down 20% in my SaaS after EU introduced PSD2

#30

Post by dr_faustus »

EU did not "introduce" PSD2 this year, it was/should have been in effect since Sept 2019!

However, the member states (and therefore the EU) have cut the banks an inordinate amount of slack to get their shit together, even though they have been heavily involved in the writing of PSD2 and had since 2015 (!) to implement everything. Here in Germany, in September 2019, which should have been the hard end of a one year grace period, practically no bank actually had a working PSD2 API or had implemented 2 factor authorization properly.

So all the whining about PSD2 six years after it passed is ridiculous. Everybody had plenty of warning and time to get their site prepared and checkout processes optimized. And quite frankly, unless the author of the article is running some kind of one-click order scam, I find the drop of up to 50% in conversion highly unlikely. From my experience with dozens of e-commerce site, the drop is negligible. And considering the rampant credit card fraud, 2FA was long overdue.

Post reply on HN