As you may be aware, PSD2 is now a regulation for banks and payment services providers across the UK and the EU. Compliance with PSD2 has been one of the most important challenges for financial institutions and the time has come to be fully compliant.
Payment Services Directive Two (PSD2) is a piece of legislation designed to force providers of payment services to improve customer authentication processes around eCommerce transactions.
So, what does this look like in the real world? PSD2 is having a big impact on the way merchants take payments from their customers. It introduces a two-factor ID requirement for certain transactions, potentially creating additional friction at the checkout.
The payment process
In order to make a payment, customers will be required to provide two forms of ID from the following three options:
Knowledge: something only the customer knows, such as a PIN or password.
Possession: something only the customer has, such as a mobile phone or payment card.
Inherence: something unique to the customer, such as their fingerprint.
Many banks have to comply by introducing OTPs (One Time Pins) via email or SMS for payments online. This can have a major impact on the customer experience and it is too early to tell how these additional measures will affect customer conversion rates for online purchases.
The innovation of Tap-on-Phone technology
WIZZIT’s Tap-On-Phone solution is a technology we believe solves many of the challenges around PSD2. Customers using this as a checkout payment option will only require tapping their bank card to their mobile device, inputting their pin on the pin pad when it appears and the transaction is made.
There is no need for OTPs and there is no need for having to put card details onto the web to make the payment. We believe this is a more convenient, safer, and quicker solution for paying online.