Survey reveals ‘staggering’ disparity in PSD2 awareness

Eido Gal at Riskified

Eido Gal, co-founder and CEO of Riskified

A survey has found that 88% of European retailers believe consumers know about the upcoming Payment Services Directive 2 (PSD2), while 76% of consumers claim they have never even heard of it.

The research, conducted by eCommerce solution provider Riskified, surveyed 2,000 consumers and 200 retailers and found a ‘staggering’ disparity between retailers’ and online shoppers’ awareness of the directive.

Nine out of ten (88%) of the surveyed retailers said they think their online customers are ‘somewhat’ or ‘very aware’ of the legislation, but 22% also said they have not taken any steps to minimise the negative impact PSD2 could have on their sales. In addition, 32% said they would rather cancel their online purchase and go elsewhere than go through PSD2 verification measures.

Riskified surveyed respondents across the UK, Germany, France and Spain on PSD2, which is set to add security measures for all online transactions over €30. This means that for most online transactions, consumers will need to undergo multi-factor authentication to verify identities, such as entering a code received via their mobile phone, providing biometric data such as a fingerprint, or other forms of authentication.

In the UK, 74% of consumers claimed to not have heard of PSD2, while 92% of retailers believed customers to be ‘somewhat’ or ‘very aware’.

One in three (33%) consumers said they would cancel their online purchase and go elsewhere if presented with PSD2’s identity verification requirements, while one in 18% of the surveyed retailers still has not taken any steps to minimise negative impact.

Commenting on the findings, Eido Gal, co-founder and CEO of Riskified, said: “Fraud is a major concern in eCommerce. We’re always in favour of better security, but it shouldn’t have to be a trade-off with the customer experience. Unfortunately, some of PSD2’s security requirements could have a detrimental effect on online shopping, leading to unhappy customers and cart abandonment.

“As these results show, anything that interferes with the online checkout process puts merchants at risk of losing customers and revenue. As PSD2 comes into effect, merchants should do everything they can to continue to provide excellent customer experience, while keeping transactions secured and fraud levels as low as possible.”

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