As if the travel industry was not complicated enough with its overuse of acronyms and dizzying terms we now have to contend with something known as PSD2. You may have heard phrases like PSD2, 3D Secure, Strong Customer Authentication, and Two-factor authentication over the last few weeks. So what on earth does that mean and how will it impact you? We’ve de-mystified PSD2 below:
What is PSD2 and when does it start?
Quite simply put, PSD2 is the revised version of PSD (Payment Service Directive). It is a European directive that comes into force on September 14th 2019. After September 14, 2019, every online transaction that passes through the EEA must have SCA tied to it – unless an exemption applies.
In summary, PSD2 states that it is no longer sufficient to simply ask for a guest’s credit card for online transactions, but rather a double authentication (known as Strong Customer Authentication or SCA) is now required to authorise the transaction. This means that at least two of the three factors will be required to complete a transaction:
How will this affect me?
PSD2 affects more than just the travel and hospitality sector; it will impact all aspects of retail. Theoretically PSD2 is due to begin from September 14th, however, the FCA has recently confirmed that there will be a grace period. This has not yet been verified by the EEA. SCA is aimed at decreasing online payment fraud: Security and trust are very important factors for a great customer experience, which is why we strongly recommend becoming compliant as soon as possible.
What do I need to do?
We’ve been working with our payment vendors/gateways to get all of the systems and processes in place to ensure there is minimal disruption to your business.
For customers that wish to use two-factor authentication (3D Secure version 1), this facility will continue to be available for customers that are processing reservations through their own RealEx/Global Payments accounts. As the specification for 3DSecure 2 matures, we along with our payment processing partners will begin the rollout of this newer authentication protocol on a customer-by-customer basis. We will ensure that all customers are informed about any changes to their payment processing configuration as these initiatives are rolled out.
We will also continuously review best practice for online payment processing to ensure that your customers have a secure but frictionless online booking experience. In time this may include support for additional payment gateways and methods and may include more secure biometric authentication.
If you have any questions about any of the information listed above please contact a member of the team.