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Payments down 20% in my SaaS after EU introduced PSD2

globalbankingandfinance.com

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

#71

Post by cinntaile »

toxik wrote: post #67
TazeTSchnitzel wrote: post #33

Earlier quoted context omitted.

Here in Sweden, some major banks already refused to let you do card transactions without SCA/3DS, before PSD2 was even passed. As a result, PSD2 finally being implemented is a welcome relief for me, because those annoying services that would always cause a card decline are now being forced to show a 3DS prompt instead. That prompt is also pretty convenient here because of the wide deployment of Mobile BankID . (The e…

Meanwhile, Sweden’s response to PayPal, Klarna, “integrate” with your internet bank by logging in to it and pretending to be you. The authentication prompt you get clearly says “you are logging in to $yourBank” when you do it too.

This is also the result of regulations. Opening up the banks "APIs" to outsiders.

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

#72

Post by karatinversion »

WesolyKubeczek wrote: post #56
jeroenhd wrote: post #39

Earlier quoted context omitted.

Seriously, if having to stand up and get whatever 2FA token thing your bank needs is too much effort for a purchase on your site, then I have strong doubts about how much your service is really worth. Another explanation would be that customers run into trouble because they don't know how to use secure online payments. In my opinion, those customers probably shouldn't be doing any online banking on their own with the…

Seriously, I'm used to a bit of contemplation before I hit that final "Buy" and proceed to the payment gateway. I like it. I like that I have to enter my billing/shipping addresses. Decide if I want an invoice for a business or an individual. Think again. Go-around hunting for a better option one last time. Lately, I've had a harrowing experience of misclicking on Amazon. The bastards have put "Add to Cart" and "Buy…

If you don’t cancel the purchase on principle, it was the correct (revenue maximising) design.

Not that I can talk, this is how I started my print subscription.

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

#73

Post by andraz »

hocuspocus wrote: post #22

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…

If Mastercard or Visa did an app that would work across all of their cards, that would be ok. But how can a separate app from each bank be considered better than SMS? It's just an annoying lock-in. And the quality of apps from many banks is sub-par.

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

#74

Post by TazeTSchnitzel »

SOLAR_FIELDS wrote: post #70
TazeTSchnitzel wrote: post #33

Earlier quoted context omitted.

Here in Sweden, some major banks already refused to let you do card transactions without SCA/3DS, before PSD2 was even passed. As a result, PSD2 finally being implemented is a welcome relief for me, because those annoying services that would always cause a card decline are now being forced to show a 3DS prompt instead. That prompt is also pretty convenient here because of the wide deployment of Mobile BankID . (The e…

I don’t know payments infrastructure super well, but reading your comment it makes me wonder if what you are talking about is related to the card woes that I had when I lived there in 2018. Not having a Swedish bank account and paying for larger sums with my American credit card would often trigger declines and I would have to contact my card issuer to authorize the payment to go through frequently. I specifically re…

You were most likely experiencing a problem on the opposite end: the merchant (or their payment processor) rejecting you, rather than your card issuer.

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

#75

Post by isbvhodnvemrwvn »

ojagodzinski wrote: post #28

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 ha…

It's probably worth noting that online transactions with payment cards were never the dominant form of payment, many people preferred to send a bank transfer directly (with delay until next payment session) or use a number of services which work as middle men to settle these transactions instantly.

Card payments are often seen as the least secure way of paying for stuff, but they are mildly more convenient than sending a bank transfer.

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

#76

Post by Matthias1 »

Denvercoder9 wrote: post #13

This article would be significantly better if it introduces what PSD2 and 3DS actually are, for those unaware of the abbreviations. PSD2 - https://en.wikipedia.org/wiki/Payment_Services_Directive#Rev... 3DS - https://en.wikipedia.org/wiki/3-D_Secure Furthermore, I want to note that the author works for a company that sells products that "eliminate unnecessary 3DS friction" (in their own words).

I found those links slightly difficult to understand. Am I correct in summarizing these definitions as follows?

PSD2—The EU law requiring your bank/card issuer to establish SCA for online purchases.

SCA—Strong Customer Authentication: something in addition to a credit card number, e.g. your bank account password, a mobile push notification, a SMS code.

3DS—3-Domain secure, the protocol used by online merchants to communicate with the bank in order to establish SCA. This seems to be complicated by the fact that most banks aren't implementing this protocol themselves, but using a third party. So you get redirected to the website of that third party in order to authenticate a transaction.

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

#77

Post by bjohnson225 »

hocuspocus wrote: post #22

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…

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

Yeah, if PSD2 had an impact as dramatic as the article says then there would be a massive amount of noise from all EU/UK retailers. Instead we get an article from somebody with something to sell.

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

#78

Post by lxgr »

globile wrote: post #64
morpheuskafka wrote: post #3

> The first thing that can reduce conversions is the higher rate of 3DS triggered user abandonment. Since many consumers are not familiar with the 3DS process, there is a higher chance of abandonment during the authentication process. This would presumably go away once PSD2 is fully implemented and all purchases require it, which is a benefit of requiring it by law rather than letting merchants choose whether or not…

It quickly gets complicated. There are many more variables to take into account. - SCA exemptions - Prepaid Cards (with no built in 2FA support) - Banks in less developed markets (No 3DS) - "We encountered a 3DS processing error" is a common nondescript message which occurs with international payments For regular merchants, the decrease in conversion (double digit) is VERY far away from any improvements in chargeback…

Depends on the business though, right?

In a high-value, low-margin business, reducing chargeback losses to almost zero might be worth the cost of a double-digit conversion drop. In other circumstances, the same numbers can be catastrophic.

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

#79

Post by jameshart »

Matthias1 wrote: post #76
Denvercoder9 wrote: post #13

This article would be significantly better if it introduces what PSD2 and 3DS actually are, for those unaware of the abbreviations. PSD2 - https://en.wikipedia.org/wiki/Payment_Services_Directive#Rev... 3DS - https://en.wikipedia.org/wiki/3-D_Secure Furthermore, I want to note that the author works for a company that sells products that "eliminate unnecessary 3DS friction" (in their own words).

I found those links slightly difficult to understand. Am I correct in summarizing these definitions as follows? PSD2—The EU law requiring your bank/card issuer to establish SCA for online purchases. SCA—Strong Customer Authentication: something in addition to a credit card number, e.g. your bank account password, a mobile push notification, a SMS code. 3DS—3-Domain secure, the protocol used by online merchants to com…

This is an accurate summary, yes.

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

#80

Post by WheelsAtLarge »

There's always going to be a decline in sales when new friction is added to a process. But, as people get used to the process those sales come back. The idea that nothing can change because it will hurt sales is short sighted. It leads to a stagnated system where competition will beat you out of existence.

PSD2 is a process that's system wide and needed so if things need to change this is the best way to do it where everyone takes the hit together as a way to move forward.

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