Here's how online retailers can prepare for upcoming EU deadline on digital transactions


Woman shopping online

Digital e-commerce has grown exponentially and offers a lifeline to many retailers. Consumers love the convenience of online retail. It has never been easier to shop online, on mobile, and even by voice through smart speakers — in fact, 80% of Europeans now use their mobiles to make purchases[1]. However, new ways to shop and to pay have added complexity for issuers and online retailers who have been tasked with safeguarding our data from cybercriminals. How can we continue to shop online and stay safe?

Enter new regulation — Payment Service Directive 2 (PSD2).

This September, European online retailers must adhere to this new regulation and authenticate digital transactions — unless specific exemptions described by PSD2 apply — by adopting the new EMV 3D Secure (EMV 3DS) standard for payments. To help demystify the confusing acronyms, here are two ways in which the new standards will affect you.

1. Easier payments and keeping fraud levels in check.

The new regulation leverages the advances in technology to help online retailers provide an easier checkout experience across their devices. For example, with EMV 3DS and its power to exchange 10x more data, authentications become more secure. Because 75% of fraud takes place online,[2] the new regulation is designed to enable issuers to identify fraud when it is happening, protecting both retailers and their customers from unwanted threats.

2. Reducing cart abandonment.

Your sales are through the roof, your customers are offering up testimonials, however, items are still getting left behind at check-out. Sounds familiar? Between 20% and 25% of online purchases in Europe are abandoned before completion[3]. Many hours are spent trying to understand why. Did the customer change their mind? Find a better deal?

But sometimes it’s not personal. It is simply the process to buy was overloaded with friction, requiring one too many sign-ins from the customer. The new EMV 3DS standard and Mastercard’s Identity Check support easy to use authentication methods like biometrics via mobile apps which make it easier for the shopper to complete their purchase, driving up profitability for retailers and user experience.

What do online retailers need to do?

To be compliant, have a look at additional information on Identity Check for retailers and do make sure you contact your acquirer or payment service provider to ensure your business is ready. Don’t forget to speak to your customers. Let them know you will be making changes to your platform, highlighting the benefits, such as an easier, simpler process and more secure payment experience.

These changes will ensure that your transactions not only comply with PSD2 but also that card approval and sales conversion rates are optimal.

This post is sponsored by Mastercard. | Content written and provided by Mastercard.

1. Online-representative European Mobile Commerce Study across 12 markets- conducted by Innofact, November 2018

2, Euromonitor, FICO, 2016

3. Digitas LBi. Digital. Connected commerce survey 2017

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