26 October 2021
PSD2 and 3DS v2 require strong buyer authentication, which can hurt your marketplace conversion rates. The number of authentication factors is now two. This means consumers have to complete an extra step, which lengthens their shopping journey and increases the risk of cart abandonment. So if you notice a drop in your conversion rate, here are our tips for ensuring that PSD2 and 3DS v2 no longer impact your buyers’ checkout journey.
The second Payment Services Directive (PSD2) came into force in September 2019. PSD2 includes various objectives, including making online payments more secure. If this evolution is synonymous with a gain in serenity for buyers, it nevertheless comes to disrupt their habits by introducing the reinforced authentication with two factors. This type of authentication replaces the code received by text message, which is no longer considered secure enough. This authentication consists in combining two elements among three categories:
This new payment path requires time for buyers to get used to the new procedure. The less experienced buyers may not know how to proceed at first, and will then be tempted to abandon their purchase. To prevent this from happening, you can help them develop new habits. But first, you need to make sure that your payment solution is PSD2 compliant. If you use a Payment Service Provider, make sure that it manages the softdecline; otherwise, the payment risks being rejected.
There are two types of levers to ensure that the DSP2 does not impact the conversion rate of your marketplace: marketing and technical. To reassure your buyers, you can deploy a number of marketing communication actions. On the other hand, technical solutions exist to facilitate their payment process. Here are 5 tips on how to do this, along with concrete examples of how to implement them.
Your newsletter is an excellent information medium, which you can take advantage of in the context of the new payment path imposed by the PSD2. So, don’t hesitate to add to your newsletter an explanatory paragraph on how two-factor authentication works. Your buyers will thus be informed of the procedure to follow, which will avoid surprises and disappointments at the time of payment.
Here is an example of text to integrate into your newsletter ?
Payment security: additional authentication step
New European rules have been put in place to strengthen the security of your online payments. To validate your payment, you must now authenticate yourself via your banking application.
After validation of the basket, you receive a notification on your smartphone. You just have to click on it to authenticate yourself with your password or your fingerprint. Then go back to the merchant’s website to make sure the payment is validated. It’s simple and secure!
If you have any questions about this new validation system, please do not hesitate to contact us.
Use cart abandonment emails to reassure your buyers about double authentication. One of the main reasons consumers abandon their shopping carts is the lack of security or confidence in the payment process. The new authentication system, still unknown, can be the cause of their abandonment. It is then necessary to explain to them how to finalise their purchase.
Here is a typical email to send to your buyers in case of cart abandonment ?
Your basket is waiting for you!
You have recently added items to your shopping cart without confirming your order. Maybe you didn’t have time to finalise your purchase or you forgot about it? Good news: your items are still available!
Here is the summary of your basket:
Need help to finalise your order?
To validate your purchase, enter your credit card details on the payment page. After validation, a notification will be sent to your smartphone via your banking application. You just have to click on it and authenticate yourself, thanks to your password or your fingerprint. Then go back to the merchant’s website to make sure the payment has been validated. It’s simple and secure!
If you have any questions about this new validation system, don’t hesitate to contact us!
Your website is an ideal means of communication to inform your buyers of the new payment regulations. So, don’t hesitate to enrich your T&Cs by mentioning the new regulation. You can also create a section dedicated to PSD2 in your FAQ, which will facilitate access to information for your buyers.
Here is an example of a text to integrate to your T&Cs ?
Payments by credit card require a reinforced authentication thanks to the 3D Secure system. After entering your bank details on the payment page, you will receive a notification on your smartphone via your bank’s application. You will then be able to authenticate yourself using your password or fingerprint. Once the authentication is validated, go back to the merchant’s website: your order is confirmed. You will then receive a confirmation email in your mailbox.
Here is an example of a text to integrate to your FAQ in a dedicated section ?
Frequently asked questions about PSD2 and strong authentication
The PSD2 or Second Payment Services Directive is the regulation that governs payment processes. One of its objectives is to secure online payments. The PSD2 provides for a reinforced authentication which requires two elements to be present in order to make a purchase. These two authentication factors can belong to 3 categories:
To validate your payment, you must now authenticate yourself via your banking application. After validation of the basket, you receive a notification on your smartphone (1er authentication factor). You just have to click on it to authenticate yourself with your password or your fingerprint (2nd authentication factor). Once the authentication is validated, go back to the merchant site: your order is confirmed.
By providing information about PSD2 directly on your platform, you ensure that your buyers see your message. Informative banners and pop-ups are very effective in this respect. They are displayed on the screen of your buyers, so there is no risk that they will miss the information.
Here is a typical text to use in your banners or pop-ups on your home page ?
To validate your payment, you must now authenticate yourself via your banking application from your smartphone. This new approach is in line with European regulations governing the security of online transactions.
Here is a typical text to use in your banners or pop-ups on your payment page ?
Validation of your payment
To finalise your order, do not forget to go to your banking application to validate your payment.
Our final tip for ensuring that PSD2 and 3DS v2 don’t impact your marketplace’s conversion rate? Implement new fields that increase your frictionless rate. These additional fields allow you to bypass PSD2: reinforced authentication is no longer required to proceed with the purchase. The payment can thus be made quickly, without verification, according to the risk assessment of the transaction. This improves the user experience — the result: fewer abandoned shopping carts and a boosted conversion rate.
Aware of the challenges related to the PSD2 requirements, Lemonway has implemented fields allowing frictionless payments. Thanks to this technology, the drop in your conversion rate is a distant memory!
If you are a Lemonway partner, do not hesitate to contact your account manager to discuss this evolution. If not, our team will be happy to help you set up a secure payment process. So, contact us!
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