Will issuing banks be ready for PSD2? Notes from Ravelin’s Paris Roundtable

A few weeks ago the Ravelin Roundtable took place in the City of Light on an unseasonably warm February day. We were delighted to host the lunch with our partners ProcessOut who are shaking up the world of smart payment routing.

Roundtable guests came from a diverse range of online commerce merchants, including:

• Ankama - an independent entertainment and digital creation group.
• Alma - instalment payment solution for ecommerce.
• Mister Auto - an e-commerce company specializing in the sale of car parts.
• Oui.Sncf - online sales of passes point-to-point tickets for rail travel around Europe.
• Weekendesk - travel booking site.
• Vente Privee - online flash sales for fashion, accessories, toys, watches, home appliances, sports equipment, technology, and wines.

Participants shared skepticism about how much of the directive can be delivered in September - “somewhere between something and nothing”. Many issuing banks are talking confidently of delivery, but there's insufficient clarity and a very squeezed timeframe.

There's also the issue of whether the PSP acquirers can be ready for September. There are challenging times ahead - merchants at the table indicated they will switch and choose between PSPs based on their ability to deliver. France has added complexity of some banks being both issuers and acquirers.

Merchants were concerned about whether 3DS2.0 can live up the the promises behind it. Implementation is ‘busy’ with a lot of communication between issuer, acquirer and merchant. This will mean it will be difficult to deliver a response in the timeframes consumers currently demand. No matter how well it works, it will still be an interruption to the buyer journey. The most successful businesses will be those that can find exemptions to it, shift liability and maximise acceptance. We expect merchants to have a laser-like focus on this from September.

The question lingered throughout the discussion: if an issuer takes a hard line on PSD2, are they really willing to reject the volume of "non-compliant" transactions? Can they risk being pushed to the back of their customers’ wallets while a competitor with a more lax policy moves to the front?

To hear many some background to the PSD2 discussions you can find a link to an MRC webinar here led by Ravelin CEO Martin Sweeney or read more about this here.

For information about participation in Ravelin Roundtables and events please contact valma@ravelin.com

Learn more about PSD2 and SCA here.