Payments down 20% in my SaaS after EU introduced PSD2

This breaks more often than you'd think. I'm still locked out of Facebook on one device because I can't seem to receive the unlock notification and I'm terrified to reinstall Facebook on my phone and then be actually locked out. I'm not a fan of Facebook, but it's the only way to contact some of my friends/family these days via video.

I've also had similar issues with actual banks where the notification appeared and I accidentally tapped "decline" or even dismissed the notification by accident. I've also never received them (mostly with ~Transfer~Wise). Edit to add: I've also been too lazy to walk to the phone charger to press "accept" and just given up.

I think it's a pretty well known phenomenon in ecommerce that the more "clicks" you add to checkout, the less % of people that will make it to the end. I don't see this decreasing cart abandonment at all.

Good. Means you've manipulated people into spending their money very intensely if they will abandon the transaction once the first rational thought comes in. I would personally add a third factor for good measure.

3DS stands for 3 Domain Secure. Payment processing requires a lot of service providers to co-ordinate; card issuer, merchant acquirer, card network to name a few.

The three domains in 3D refers to the domains of Issuer (the bank that issued the your card), Acquirer (the bank that the merchant has their account in), and the Network (Visa, Mastercard etc., which connects Issuing banks and Acquiring banks).

I'm vastly simplifying because now a days there are new entities which are difficult to typecast into one of Issuer/Acquirer/Network because depending on the scenario they can act as any or all three.

Unlike the Internet which has reasonably well defined protocols/services to provide end user services (HTTP, SMTP, DNS etc.,) online payment processing has evolved by monkey-patching systems as newer challenges have arose. There are no well defined protocols or standards so you have these vast network of systems that somehow work-together to process online payments. Once in a while it fails exposing its innards like how people came to learn about T + 2 settlement during Gameshop saga.

> Why do these exist and what did they solve?

3DS is kind of a protocol that'll enable a card holder to authorise a payment while minimising the number of service providers that have access to their card details. A typical implementation of 3DS requires card holder to authorise a payment through PIN. Another is through second factor auth such as SMS OTP, or RSA tokens, Apple's Face ID.

> What is PSD2?

This is a European specific regulation to make payments more secure. 3DS is one of its requirements.

I'm not saying it's frictionless nor perfect, but things were worse earlier. Card and identity fraud is increasing, and will continue to be a valuable target, not least because we're moving towards a cashless society (some say).