How does the introduction of Payment Services Directive 2 in 2019 affect retailers?

The European Union gave a green light to the Payment Services Directive 2 (PSD2) in November 2017, which is basically a collection of regulatory technical standards (RTS) enabling consumers to benefit from safer and more innovative electronic payments.

In March 2019 banks must make their application programming interfaces (API) accessible to payment service providers. In the summer of 2019 instant payment systems can be launched, e.g. in Hungary the GIRO Instant system. In September 2019 strong customer authentication rules (SCA) enter into force – not only service providers, but also retailers need to prepare for this.

How will SCA affect retailers? The objective of strong customer authentication is to increase the safety of bank card and online payments, in both offline and online retail. There are two key things retailers need to keep in mind: 1. with small value transactions using PayPass, shoppers will have to use their PIN code from time to time (e.g. after every fifth payment); 2. with repeated payments made online a new concept appears, called request to pay (RTP): retailers authorised by the customer in advance, can initiate a request to pay from the customer’s bank account, which can be made without the customer’s verification – in this case there will be a two-phase SCA. //