That said, the fact that PSD2 is effectively changing how merchants transact doesn’t mean the merchants in question understand what those changes mean. In the January PSD2 Tracker™, PYMNTS examines how money movement and data flow are getting an upgrade with PSD2, as well as how the upcoming SCA regulation is bound to affect user authentication. The Tracker also looks into how PSD2 could potentially serve as guidance for other countries that may be reevaluating their own rules on data privacy and payments.
PSD2 may have a greater effect on payments, even outside the EU, as consumers all over the globe are clamoring for more data security. Eighty percent of U.S. consumers, for instance, want the right to know where their personal data is and how it's being used, according to recent surveys.
Meanwhile, to help along some of the companies that are still confused about how to comply with GDPR and PSD2, the European Data Protection Board (EDPB) has issued regulatory guidance on the topic. Despite GDPR coming into effect a full six months ago, 50 percent of European merchants still aren’t compliant with the regulation.
Additionally, GDPR has to deal with some growing pains. More than 3,200 GDPR breaches were logged within the first seven months after the regulation went into effect, which means the open data flow it supports may need to come with better fraud protections sooner rather than late.
Visit our News and Trends section for more information on the impact of PSD2.
PSD2 is already having a strong impact on the travel market, with merchants ranging from airlines and hotels to travel aggregators working with third-party services, deploying new authentication standards while still adapting to changing customer preferences. The challenge, according to Jean-Christophe Lacour, head of merchant services for payments processor Amadeus, is balancing the need for stronger authentication with a frictionless experience.
“In the past, typically retailers — not just travel companies — had to make a choice really between frictionless [payments] and security,” he said. That’s no longer an option with PSD2 — now, retailers need to provide both.
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