by rokkk on 5/10/21, 8:45 PM with 117 comments
by Denvercoder9 on 5/10/21, 9:07 PM
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).
by morpheuskafka on 5/10/21, 9:01 PM
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 to require it. Requiring it is a common good in the sense that it reduces the economy's overall loss due to fraud.
Additionally, as the article mentions, using 3DS shifts liability for charge not authorized disputes from the merchant to the bank. Thus, the decreased rate of conversions must be compared against decreased losses due to chargebacks.
by hocuspocus on 5/10/21, 9:11 PM
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, you have to unlock and accept the transaction).
- We'll see some harmonization across EU/EEA merchants. No more cases of "the German website doesn't trigger 3DS but the French one does".
by dr_faustus on 5/10/21, 9:17 PM
However, the member states (and therefore the EU) have cut the banks an inordinate amount of slack to get their shit together, even though they have been heavily involved in the writing of PSD2 and had since 2015 (!) to implement everything. Here in Germany, in September 2019, which should have been the hard end of a one year grace period, practically no bank actually had a working PSD2 API or had implemented 2 factor authorization properly.
So all the whining about PSD2 six years after it passed is ridiculous. Everybody had plenty of warning and time to get their site prepared and checkout processes optimized. And quite frankly, unless the author of the article is running some kind of one-click order scam, I find the drop of up to 50% in conversion highly unlikely. From my experience with dozens of e-commerce site, the drop is negligible. And considering the rampant credit card fraud, 2FA was long overdue.
by WesolyKubeczek on 5/10/21, 9:17 PM
→ Customers who have had their card on file will fail the next subscription payment. Many are going to discover they have been paying for months/years for something they didn't really need, and walk away.
→ Incorrect 3D-Secure integration will cause payments from EU to fail straight away. Even some payment gateways didn't understand how it worked back when the enforcement loomed for the first time, and this is literally their job. The solution is to read the documentation carefully and fix your stuff.
It's a misconception that people are going to get confused by PSD2. We in Europe, depending on the bank, have had it for two years now. We got used to it and if we really want to pay, we will.
by estaseuropano on 5/10/21, 9:18 PM
> Since many consumers are not familiar with the 3DS process, there is a higher chance of abandonment during the authentication process. Users may also choose to abandon a transaction simply because there are additional steps to complete, giving them more time to contemplate their purchase.
The data here is not really provided so we have no way of verifying they are stating e.g. simply that conversion in Germany went from 80%+ to 40%+ just due to PSD2 requirements to verify identify. 50% of consumers stop their purchase because they have to verify their CC? That seems absurd.
If the reason as cited above is unfamiliarity this means it is a purely temporary impact. If its birthing issues of implementation that too should be temporary. If consumers stop their biy due to reflection or realising that they don't trust the shop that too is a good thing.
by WesolyKubeczek on 5/10/21, 9:04 PM
Or integrate with Android Pay/Apple Pay.
Cry me a river, but I rather prefer to be in control about who gets to withdraw money from my card, and how much.
by codethief on 5/10/21, 9:13 PM
1) I now have to do the 3DS procedure for amounts as small as 1,80€
2) My bank's 3DS "website" requires me to enter my online banking PIN (the one for my entire account, not just my credit card PIN!) and since that website gets opened in an Android WebView I can't even be sure that the app invoking the WebView doesn't actually obtain my PIN through a key logger. Fantastic.
by vineyardmike on 5/10/21, 9:03 PM
What is PSD2?
What is 3DS?
Why do these exist and what did they solve?
Edit: Thanks for the responses everyone!
by globile on 5/10/21, 9:15 PM
Basically, try 3DS (with no authentication), then try regular charge (NON 3DS), then if all else fails try a full 3DS charge. You'd be surprised by the disparity, especially internationally, and we do recoup some charges at the expense of triggering some unintended blockage.
When asking our provider (Stripe in our case) about the best strategy for this, it always comes down to , "Let SCA (Strong Customer Auth) rules and logic handle everything", but this simply doesn't work well.
I really wish the likes of Adyen, Stripe, etc...would help out with better decline ratio strategies.
I think we are all plagued by "do_not_honor" and "transaction_not_allowed" codes that do little to move us in any direction...
[0] https://medium.com/@globile/using-stripe-to-sell-internation...
EDIT: Fixed the order of actions...
by unilynx on 5/10/21, 9:12 PM
A drop in EU e-commerce sales between 20% and 50% would be big news we wouldn't have missed, so where are these sales going ? Or are these transactions still a tiny bit of the overall e-commerce value? If users opt for a cheaper (and not easily clawed back) payment method because they can't complete the 3DS challenge, the merchants may still win.
by ballenf on 5/10/21, 9:30 PM
My spending, consumption and general wasteful consumerism is healthier when I don't have Amazon Prime. I'm more thoughtful about what I need and will batch up purchases, often removing a portion of the cart.
by thegeomaster on 5/10/21, 9:25 PM
Good. Means you've manipulated people into spending their money very intensely if they will abandon the transaction once the first rational thought comes in. I would personally add a third factor for good measure.
by ojagodzinski on 5/10/21, 9:16 PM
In 2020 Blik had 7 million users and processed 424 million transactions. In 2019, the number of Blik transactions exceeded the number of transactions made on the Polish Internet with payment cards.
In PSD2/3DS world paying with card is real pain in the ass, only advantage is transaction insurance and chargeback.
by Merem on 5/10/21, 10:33 PM
by WheelsAtLarge on 5/10/21, 10:12 PM
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.
by rokkk on 5/12/21, 7:13 AM
This is not my article, I just found it when searching for any data on the subject. I'm aware of the article author's bias on the subject.
We run a B2B SaaS and 20% is the drop we've seen (comparing to monthly numbers of the last 5 years). This still needs to be analyzed better but it's taking time due to our messy system of multiple carts using different payment service providers.
Personally as an EU citizen I'm very in favor in these changes. I think the UX will become even more of a differentiator for banks and related products which is great. Banks FINALLY being forced to open APIs is also great for the fintech industry, so I'm not bitter at all. Just curious to see what other SaaS businesses have seen in their Euro traffic.
by RicoElectrico on 5/10/21, 9:14 PM
The bonus is that Przelewy24 is often presented as a payment option in global shops like Steam or AliExpress, so I can use it there as well.
by kristofferR on 5/10/21, 9:05 PM
Previously you had to use an ancient SMS based SIM app on your phone or use a dongle to authenticate, took over a minute usually.
A way for retailers to "bypass" 3DS is to use Klarna or similar (free in-app invoice that needs to be paid within 14 days). Even though it's usually quite simple to use my debit card, it's still more of a hassle than paying whenever I want within 14 days, so that's what I choose when I'm in a hurry.
by willeh on 5/10/21, 9:03 PM
by Jiocus on 5/10/21, 9:46 PM
From the tone of the article, I imagine the author was resisting 3-D Secure from the beginning and settled their minds already and so, they will only see their own negativity reflected back on them when trying to make sense of it.
by cabirum on 5/10/21, 10:25 PM
3DS is merely a positive marker for antifraud system. This means a 3ds transaction is less likely to trigger antifraud rejection, and antifraud declines are the reason for user abandonment - you can't simply retry a payment attempt in that case.
by foepys on 5/10/21, 9:00 PM
A subsequent order worked by just entering my CC details.
by gray_-_wolf on 5/10/21, 10:40 PM
Why is it a bad thing that people have more time to think about things?
by the_mitsuhiko on 5/10/21, 9:16 PM
by opheliate on 5/10/21, 9:24 PM
by hnarn on 5/10/21, 9:33 PM
by aza05001 on 5/10/21, 9:01 PM
by underyx on 5/10/21, 9:04 PM
by xbar on 5/10/21, 9:36 PM