PSD2 is both Payment Service Directive was designed for countries in the EU and follows on from the original directive that was introduced in 2007. It comes into full effect on 14 September 2019 PSD2 will tighten the rules and requirements around handling Digital Marketing Company Nottingham the payment and card data.
What PSD2?
Payment Services Directive revision (PSD2) which came into force in September will have new requirements for handling cardholder authentication and aim to achieve the following two main objectives:
Improving the security of card payments: by applying a ‘Strong Authentication Consumers’ (SCA) for ‘Cardholder Not Present’ (CNP Transactions)
Increasing the level of competition in the payment services sector: By leveling the playing field for payment service providers (including new players) to increase competition.
Any major change in PSD2?
The most important change for traders in PSD2 are:
- Surcharging New
You will no longer be able to enter an additional cost B2C payments using personal credit / debit cards, but they will be allowed to add a surcharge of B2B payments using a company credit / debit card. - Strong customer authentication
PSD2 promote Strong Authentication Customer (SCA) in online payments by creating a Two-Factor Authentication (2FA) mandatory. Introducing 2FA will mean your customers will be asked two of the following:
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“Something called” Factor – card details, PIN or password that is static
“Something you have” factor – the one-time password, the on-screen QR code to scan
“Something inherited” factor – fingerprint, face or iris pattern associated with the cardholder’s registered devices
As online transactions have a higher risk of fraud in ‘cardholder not present’ (manually type card information) scenario as ‘authenticate’ (confirming buyers who they say) is weak. Introducing SCA will mean customers will be better protected against online theft and you will be protected against fraud.
3D Secure Payment
3D Secure 1.0
3D Secure 1.0 was introduced by Visa over a decade ago to strengthen the authentication process for now ‘cardholder not present’ scenario.
3D Secure acts as an additional layer of security when taking card payments online. This gives your customers a secure authentication steps before they can buy online shopping; ensure that they use the correct card details to help protect against payment card fraud.
Each card has its own 3D secure names, including:
Visa – Verified by Visa
Mastercard – Mastercard SecureCode
American Express – American Express Key
When 3D Secure enabled, customers will display the authentication screen after they enter their payment details, similar to the screenshot above. Here customers will include security questions to confirm the cardholder is who they say they are.
3D Secure 1.0 has many problems, including:
Merchants can have the option to enable or disable the 3D Secure payment gateway configuration settings for them.
The authentication process is directed customers to a third party website to verify their identity, which means not being served by a web site where users shop.
Customers only have one password authentication method usually – if they can not remember it, they will abandon the checkout process.
3D Secure 2.0
3D Secure 2.0 has been introduced to improve the existing specifications 3D Secure 1.0 while providing strong SCA (consumer strong authentication). As mentioned above, the 3D Secure 2.0 will ask the customer the following to improve the authentication process:
“Something called” Factor – card details, PIN or password that is static
“Something you have” factor – the one-time Digital Marketing Companies Nottingham password, the on-screen QR code to scan
“Something inherited” factor – fingerprint, face or iris pattern associated with the cardholder’s registered devices
It has many benefits for customers and merch.
