3DS-v2 and conversion rate: our tips for communicating with your customers

PSD2 and 3DS v2 require strong buyer authentication, which can hurt your marketplace conversion rates. The number of authentication factors is now two. This means consumers have to complete an extra step, which lengthens their shopping journey and increases the risk of cart abandonment. So if you notice a drop in your conversion rate, here are our tips for ensuring that PSD2 and 3DS v2 no longer impact your buyers’ checkout journey.

What does the 3DS v2 change?

The second Payment Services Directive (PSD2) came into force in September 2019. PSD2 includes various objectives, including making online payments more secure. If this evolution is synonymous with a gain in serenity for buyers, it nevertheless comes to disrupt their habits by introducing the reinforced authentication with two factors. This type of authentication replaces the code received by text message, which is no longer considered secure enough. This authentication consists in combining two elements among three categories:

• Something the buyer knows: password, PIN code…
• Something the buyer owns: computer, smartphone…
• Something that the buyer is: fingerprint, facial recognition…

Strong authentication for your users : typical path

1. The buyer enters his credit card number on the payment page of the your marketplace;
2. A window appears, inviting him to validate his payment by identifying himself from his banking application;
3. The buyer receives a notification on his smartphone via his bank’s application (1 authentication factor);
4. When he clicks on this notification, he arrives on the interface of his banking application where the details of his purchase are displayed;
5. It validates the transaction with an identification factor: code, fingerprint or facial recognition (2^ndfactors);
6. Once you are back on your marketplace, make sure that you have the right information. If the authentication is successful, the payment is validated.

This new payment path requires time for buyers to get used to the new procedure. The less experienced buyers may not know how to proceed at first, and will then be tempted to abandon their purchase. To prevent this from happening, you can help them develop new habits. But first, you need to make sure that your payment solution is PSD2 compliant. If you use a Payment Service Provider, make sure that it manages the softdecline; otherwise, the payment risks being rejected.

5 tips to ensure that DSP2 and 3DS v2 do not impact your marketplace’s conversion rate

There are two types of levers to ensure that the DSP2 does not impact the conversion rate of your marketplace: marketing and technical. To reassure your buyers, you can deploy a number of marketing communication actions. On the other hand, technical solutions exist to facilitate their payment process. Here are 5 tips on how to do this, along with concrete examples of how to implement them.

1. Communicate about PSD2 in your newsletter

Your newsletter is an excellent information medium, which you can take advantage of in the context of the new payment path imposed by the PSD2. So, don’t hesitate to add to your newsletter an explanatory paragraph on how two-factor authentication works. Your buyers will thus be informed of the procedure to follow, which will avoid surprises and disappointments at the time of payment.

Here is an example of text to integrate into your newsletter ?

2. Send an email to the buyer in case of cart abandonment

Use cart abandonment emails to reassure your buyers about double authentication. One of the main reasons consumers abandon their shopping carts is the lack of security or confidence in the payment process. The new authentication system, still unknown, can be the cause of their abandonment. It is then necessary to explain to them how to finalise their purchase.

Here is a typical email to send to your buyers in case of cart abandonment ?

3. Explain PSD2 on your marketplace

Your website is an ideal means of communication to inform your buyers of the new payment regulations. So, don’t hesitate to enrich your T&Cs by mentioning the new regulation. You can also create a section dedicated to PSD2 in your FAQ, which will facilitate access to information for your buyers.

Here is an example of a text to integrate to your T&Cs ?

Here is an example of a text to integrate to your FAQ in a dedicated section ?

4. Set up informative banners or pop-ups on the payment page

By providing information about PSD2 directly on your platform, you ensure that your buyers see your message. Informative banners and pop-ups are very effective in this respect. They are displayed on the screen of your buyers, so there is no risk that they will miss the information.

Here is a typical text to use in your banners or pop-ups on your home page ?

Here is a typical text to use in your banners or pop-ups on your payment page ?

5. Implement elements that increase the frictionless rate

Our final tip for ensuring that PSD2 and 3DS v2 don’t impact your marketplace’s conversion rate? Implement new fields that increase your frictionless rate. These additional fields allow you to bypass PSD2: reinforced authentication is no longer required to proceed with the purchase. The payment can thus be made quickly, without verification, according to the risk assessment of the transaction. This improves the user experience — the result: fewer abandoned shopping carts and a boosted conversion rate.

Aware of the challenges related to the PSD2 requirements, Lemonway has implemented fields allowing frictionless payments. Thanks to this technology, the drop in your conversion rate is a distant memory!

If you are a Lemonway partner, do not hesitate to contact your account manager to discuss this evolution.  If not, our team will be happy to help you set up a secure payment process. So, contact us!