EU Directive PSD2: More Shopping Cart Abandoners in Online Shops?

Now it’s here. The day when online shopping is made more difficult throughout Europe. After entering the credit card number, customers who want to start the payment process as usual receive the message that “the process cannot be executed”. This is the regulation that will enter into force on September 14, 2019. The information that the credit card is not registered with the necessary authentication system is confusing for consumers. At least for all those who have not yet informed themselves about the subject. You end up as a shopping cart abandoner in the online shop system. However, since the PSD2 is mandatory for European online shop operators, solutions must be found to retrieve and prevent shopping cart abandoners.

The date for the launch of the new directive poses a major challenge for online shops. Christmas shopping begins and with it a new guideline for Strong Customer Authentication. So there is a risk that the Christmas business will not turn out as positive as hoped. This is where the uptain software comes in. It counteracts this effect through Conversion Optimization, so that in the end both sides achieve a positive result: The consumers and the operators of online shops.

The new EU Directive PSD2 regulates online sales anew

A short overview of the terms gives a little more insight into the topic. The SCA describes the Strong Customer Authentication. From now on it is the center of the PSD2 and is used whenever someone wants to pay online. This applies to both computers and smartphones. The experiences of the last years have already shown: The more complicated the payment process in online shopping, the more people will drop out. Are online shops now facing difficult times? Not at all, because with measures such as exit intent pop-ups or abandoned cart emails, shopping cart abandoners can quickly retrieve themselves.

To remind you of technical processes

Strong Customer Authentication enables electronic payments and access to the applications that trigger them. All payment options, both B2B and B2C, are based on SCA – as long as it is done electronically and authentication is requested during the payment process. The PSD2 regulates third-party access to the customer’s bank account. At the same time, it ensures that from now on no additional fees may be charged for various payment methods.

The current challenge: Legally retrieve Cart Abandoners

The complex process of the PSD2 already makes it clear that effective solutions must be found here. It is not yet possible to predict how many consumers will suddenly decide against the complex process and become shopping cart abandoners. This applies in particular to the initial phase of the PSD2, because changes in payment transactions initially cause uncertainty among many consumers, which is why they are foregoing the planned online purchase for the time being or are frustrated and cancel it. An intelligent Conversion Optimization comes just in time. And since the new regulation will come into force in mid-September 2019, this can mean painful losses for the Christmas business. For this reason, you should deal with the issue quickly and find suitable ways to prevent and retrieve shopping dropouts.

The goal: Reduce Cart Abandonment

One way to reduce cart abandonment are the Activation Popups from uptain. Exit-Intent popups are used, which help to complete the purchase and send the already started order with suitable content. This automated procedure appears the moment the user wants to leave the shop. PSD2 will significantly increase the number of shopping cart abandoners, especially during checkout. With this software, you use the high turnover potential that shopping basket abandoners leave behind in your online shop.

Intervene Specifically in the Checkout: Abandoned Cart E-mails get buyers back

Where the PSD2 will initially generate some shopping cart dropouts, you will catch the loss with the intelligent and above all unobtrusive exit intent pop-ups and shopping cart dropouts from uptain and specifically counter the loss of sales. A web demo is therefore worthwhile in order to deal with the topic of shopping cart abandoners in the checkout. Here a high conversion optimization is possible, sometimes by up to 30 %.

A further advantage of the software is the relevant content. Messages are sent in a personalized way by e-mails. You will find personally formulated content that strengthens trust and encourages you to return to the buying process – also with regard to the somewhat more complicated procedure due to the introduction of PSD2.

With uptain’s Exit-Intent pop-ups you can prevent cart abandonment and with our e-mails you can retrieve them. The ideal combination to minimize the negative impact of PSD2 on your conversion rate. Register for a web demo and get an overview of functionality and benefits.

Frequently asked questions about PSD2 cart abandonments

Is PSD2 mandatory for online shops?

Yes. PSD2 is mandatory for all European online shop operators, so there is no opt-out. Its core requirement, Strong Customer Authentication, has applied to online payments since 14 September 2019. Because the additional authentication step makes checkout more complex, shops cannot simply implement it and stop there: they also need measures to prevent and win back the cart abandonments it causes.

What are the key changes introduced in PSD2?

PSD2 puts Strong Customer Authentication at the centre of every online payment, on computers and smartphones alike. It also regulates third-party access to the customer’s bank account and prohibits additional fees for individual payment methods. For shops the practical consequence is a longer, more complex checkout, which raises the risk that hesitant customers abandon their cart before completing payment.

What is Strong Customer Authentication (SCA)?

Strong Customer Authentication, or SCA, is the security procedure at the heart of PSD2. It enables electronic payments and access to the applications that trigger them. Every electronic payment option is covered, in B2B as well as B2C, provided authentication is requested during the payment process. It applies to purchases made on computers and on smartphones alike.

Why does PSD2 lead to more cart abandonment?

Because every additional hurdle in the payment process costs conversions. Experience shows that the more complicated online checkout becomes, the more people drop out, and the extra authentication step does exactly that. The effect is strongest at the start: changes in payment transactions unsettle consumers, so they postpone the planned purchase or cancel it out of frustration during checkout.

How do abandoned cart emails win buyers back?

Abandoned cart emails pick up customers who left a started order behind and lead them back into the buying process. The messages are sent personally rather than generically, with content formulated to build trust and remove the uncertainty that a more complicated payment procedure creates. Combined with exit-intent popups that prevent abandonment in the first place, they recover a large share of lost revenue.

How can online shops prevent cart abandonment during checkout?

Exit-intent popups address visitors at the moment they want to leave the shop and help them complete the order they have already started, with content matched to the situation. This runs automatically and targets the checkout, where authentication requirements produce the most abandonments. In the checkout, conversion optimisation of up to 30 percent is possible.

What happens in the checkout if a card is not registered for strong authentication?

Customers see the message that the process cannot be executed, without any explanation that their credit card is not registered with the required authentication system. For anyone who has not looked into the topic, that message is confusing, and the purchase ends there: the customer is logged as a cart abandoner in the shop system. Clear communication and win-back measures catch these cases.