One-third (32%) of European consumers say they would rather cancel their online purchase and go elsewhere than go through the new verification measures PSD2 will require for some transactions, a study has found.
The survey of 2,000 consumers and 200 retailers conducted by e-commerce solution provider Riskified, also found that nine out of ten retailers (88%) believe consumers are ‘somewhat’ or ‘very aware’ of PSD2. However, more than three-quarters (76%) of consumers report that they “haven’t even heard of it”.
The implementation of the regulation is set to add new security measures for all online transactions over €30 (£26). This means that for most online transactions, consumers will need to undergo multi-factor authentication to verify their identity, 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 specifically, the research revealed:
- Some 74% of consumers have not even heard of PSD2
- One in three (33%) consumers said they would cancel their online purchase and go elsewhere if presented with PSD2’s identity verification requirements
- One in five (18%) retailers still haven’t taken any steps to minimise the negative impact of PSD2 on their online sales
Eido Gal, co-founder and CEO, Riskified, said: “Fraud is a major concern in e-commerce. We’re always in favour of better security, but it shouldn’t have to be a tradeoff 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 secure and fraud levels as low as possible.”