New Report on European E-Commerce Payments in Post-PSD2 Transformation
The expected impact of SCA on the E-Commerce market in Europe
The EU’s revised Payment Services Directive (PSD2) is shaking up the E-Commerce payments market in the European Economic Area with long-lasting implications for security, competition, innovation and payment methods mix, the report reveals. One of the key provisions of PSD2 is Strong Customer Authentication, or SCA, aimed at addressing the growing threat of online payment fraud. But with consumer awareness and retailers’ readiness low, deferral of enforcement of SCA until the end of 2020, with a transition period after September 2019 has been suggested in order to address the industry’s concern over the potential billions of Euros lost due to increased cart abandonment and transaction rejection rates.
Digital payment innovation and competition driven by PSD2
Another major goal of PSD2 is opening up the digital payments market to new players, such as by requiring banks and other account-holding institutions to provide licensed third-party payment services with access to accounts at customers’ request. The new payment services that are expected to emerge from these provisions could transform the E-Commerce payments and digital finance markets, encouraging innovation and competition.
Report Coverage
- This report covers the B2C E-Commerce and online payment market in Europe with a focus on the impact of the revised Payment Services Directive (PSD2).
- The study cites quantitative and quantitative information related to this topic, such as surveys of consumers and businesses and industry estimates.
- The following aspects of PSD2 are in focus: strong customer authentication (SCA) and access to accounts/open banking.
- The report includes data mostly published within the previous 12 months. The exact date of publication of the source is stated on each chart. The time period which the data refers to differs by source.
Report Structure
- The regional chapter opens the report, featuring an overview of regionwide trends in B2C E-Commerce and online payment markets related to PSD2.
- The rest of the report is divided into country chapters, covering selected major B2C E-Commerce markets in the EU. The countries are included in the order of descending B2C E-Commerce sales.
- The following types of information were included, where available: surveys regarding the awareness and perception of PSD2 by businesses, customers and financial institutions, industry expectations and estimates with regard to the regulations’ impact on E-Commerce, conversion, cart abandonment, and chargeback rates.
- Not all of the mentioned information types were available for each of the countries covered due to varying data availability.
Table of Contents
1. Management Summary
2. Regional Developments
- Overview of the Impact of PSD2 on E-Commerce, October 2019
- B2C E-Commerce Sales in Europe, in EUR billion, and Year-on-Year Change, in %, 2013 - 2019f
- Breakdown of E-Commerce Transactions by Payment Method, in %, 2018
- Breakdown of E-Commerce Spending in the EU by Payment Method Considering PSD2 and Instant Payment Introduction, in %, 2012, 2017, 2020f, 2022f, 2027f
- Share of Retailers Who Believe That Their Online Customers are Aware of PSD2, in %, by Germany, France, Spain, the UK, and Total, October 2019
- Share of Consumers Unaware of PSD2, in %, by Germany, France, Spain, the UK, and Total, October 2019
- Overview of The Strong Customer Authentication Requirements Under PSD2, October 2019
- Overview of The Strong Customer Authentication Perceptions by Industry Participants, June 2019
- E-Commerce Merchants’ Readiness to Support Strong Customer Authentication, in %, November 2018
- Levels of Awareness and Preparation of E-Commerce Merchants to Strong Customer Authentication Requirements, by SMEs and Large Businesses, June 2019
- Share of Consumers Who Would Cancel Their Online Purchase and Buy Elsewhere if Faced with PSD2 Authentication Requirements, in %, by Germany, France, Spain, the UK and Total, October 2019
- Share of Retailers Who Have Not Taken Any Measures to Minimize the Negative Impact of PSD2 on Their E-Commerce Sales, in %, by Germany, France, Spain, the UK and Total, October 2019
- Share of Consumers Who Are Unaware of the Strong Customer Authentication Requirements for Online Purchases, in %, April 2019
- Recommended Measures to Mitigate Conversion Risks Due to SCA in E-Commerce, March 2019
- Preferred Authentication Methods, by Most Secure and Best Experience, in % of Online Shoppers, April 2019
- Share of E-Commerce Merchants Unfamiliar With 3D Secure 2, in %, and Breakdown of Expected Timeline of Implementing 3D Secure 2, in % of E-Commerce Merchants Familiar With It, in %, April 2019
- Share of E-Commerce Merchants Who Believe that SCA Will Boost the Importance of Payments as a Competitive Differentiator, in %, April 2019
- Share of E-Commerce Merchants Who Plan to Manage SCA Exemptions Completely In-House, in %, April 2019
- Overview of Expected Impact of Strong Customer Authentication (SCA) on Merchant Chargebacks in Remote Payments, by Chargeback Type, September 2019
- Share of Online Shoppers in Selected EU Countries Who Would be Likely to Pay by Direct Debit if More Businesses Offered a Subscription Option for a Regular Purchase to Avoid Complex or Lengthy Checkout, in %, June 2019
- Share of Banks Who Met the March 2019 Deadline for Providing a “Sandbox” for Third-Party Payment Providers Under PSD2, by Selected Countries, in %, March 2019
- Number of Licenses Issued to Third-Party Providers (TPPs) Under PSD2, by Account Information Service Providers (AISP) and Payment Initiation Service Providers (PISP), and Combined (AIS/PIS), by Country, August 2019
- Breakdown of Service Offerings of TPPs Enabled By the PSD2 License, in %, by B2C and B2B Customer Segments, August 2019
- Use Cases Emerging Under PSD2 and Open Banking Focused on Customers, in %, July 2017
- Use Cases Emerging Under PSD2 and Open Banking Focused on Businesses, in %, January 2019
- Breakdown of Consumers’ Awareness of Financial Providers’ Ability to Access Their Financial Information Held by Other Companies, in %, by Selected Countries, February 2019
- Breakdown of Consumers Being Happy About Financial Providers Sharing Their Financial Data With Other Companies If They Gave Consent, in %, by Selected Countries, February 2019
3. UK
- Current and Expected Share of Step-Up Requests and Declines as a Result of SCA Without a Roadmap, in % of E-Commerce Transactions, May 2019
- Breakdown of Online Shoppers by Perceiving Security or Convenience as the Most Important Factor When Paying for Something Online, in %, June 2019
- Breakdown of Online Shoppers’ Feelings Towards Complex Payment Security Processes, in %, June 2019
- Breakdown of Online Shoppers’ Attitude Towards a Brand Changing Its Payment Process to be More Secure, but Less Convenient, by Favorite Brand and New Brand, in %, June 2019
- Breakdown of Tier-1 and Tier-2 Retailers’ Awareness of PSD2 and Readiness to Comply with PSD2, in %, 2018
- Actions That Tier-1 and Tier-2 Retailers Are Ready to Take as a Result of PSD2 Regulation, in %, 2018
- Concerns of Tier-1 and Tier-2 Retailers Over PSD2, in %, 2018
4. Germany
- Breakdown of Online Shoppers by Perceiving Security or Convenience as the Most Important Factor When Paying for Something Online, in %, June 2019
- Breakdown of Online Shoppers’ Attitude Towards a Brand Changing Its Payment Process to be More Secure, but Less Convenient, by Favorite Brand and New Brand, in %, June 2019
- Breakdown of Awareness of PSD2, in % of Internet Users, August 2019
- Organizations Which Internet Users Would Trust to Access Their Bank Data, in %, August 2019
- Breakdown of Importance of Payment Topics in Merchants’ Payment Strategy Until 2020, in % of E-Commerce Merchants, 2018
- Expected Impact of 2-Factor Authentication, in % of E-Commerce Merchants, 2019
- Breakdown of Usage of 3D Secure for Credit Card Payments, in % of E-Commerce Sellers, 2017 - 2019
- Breakdown of the Perceived Change in Shopping Cart Abandonment Rates After Choosing Credit Card Payment as a Result of 3D Secure, in % of E-Commerce Sellers Using 3D Secure, 2019
5. France
- Breakdown of Online Shoppers by Perceiving Security or Convenience as the Most Important Factor When Paying for Something Online, in %, June 2019
- Breakdown of Online Shoppers’ Feelings Towards Complex Security Processes, in %, June 2019
- Breakdown of Online Shoppers’ Attitude Towards a Brand Changing Its Payment Process to be More Secure, but Less Convenient, by Favorite Brand and New Brand, in %, June 2019
6. Spain
- Breakdown of Online Shoppers by Perceiving Security or Convenience as the Most Important Factor When Paying for Something Online, in %, June 2019
- Breakdown of Online Shoppers’ Attitude Towards a Brand Changing Its Payment Process to be More Secure, but Less Convenient, by Favorite Brand and New Brand, in %, June 2019
7. Italy
- Share of Consumers Aware of The Term ‘PSD2’, in %, October 2019
8. Netherlands
- Share of Consumers Familiar with PSD2, in %, January 2019
- Share of Consumers Who Are Open to Using New Payment Services That Will Become Available as a Result of PSD2, in %, January 2019
- New Payment Services Enabled by PSD2 That Consumers Would Be Open to Use, in %, January 2019
9. Nordics
- Share of Consumers Aware of PSD2 and Its Account Information or Payment Initiation Services, in %, April 2019
- Share of Consumers Who See At Least Some Risks in Sharing Their Bank Account Information Or Allowing To Initiate Payments, in %, April 2019
Samples
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Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Alphabet Inc.
- Amazon.com Inc.
- Mastercard Inc.
- PayPal Holdings Inc.
Methodology
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