E-commerce is all about making the checkout process in online stores as quick and clear as possible for consumers, hence decreasing abandoned transactions and increasing conversions. If retailers could verify their consumers themselves, it would be simple to implement one-click checkout and could establish strong customer authentication.
The conditions have been met. The increasing popularity of internet purchasing will continue. Numerous online retailers currently recognize their clients and use a variety of strong customer authentication solutions. Customers are increasingly using smartphones and tablets for internet purchasing. Biometrics are supported by the majority of mobile devices and browsers, which streamlines authentication. Card on File based on tokenization, card data permanently saved at the merchant in the form of tokens, provides merchants with increased conversion rates and enhanced usability. This indicates that all conditions have been met for retailers to offer client authentication compatible with PSD2.
The technology of FIDO-Alliance (Fast Identity Online) is perfect as a PSD2-compliant authentication mechanism for shops. If a merchant has registered its customers securely using FIDO, the login to the merchant’s customer account may be utilized for payment authentication. In addition, to guarantee that the merchant can transmit the authentication confirmation to the card issuer, the 3-D Secure protocol version 2.2 is supplied as technical support.
Legally, merchants and card issuers may agree on this verification via bilateral contracts or employ services as “Delegated Authentication Brokers.” In this situation, just one contract per scheme is required per merchant. Card issuers are required to participate in this system unless they exercise their opt-out option. For consumers, this means they no longer need to move between the merchant app and issuer app for Strong Customer Authentication compatible with PSD2 at checkout. Whether consumers are shopping on a PC, tablet, or smartphone, they may complete the payment with a single click or biometric identification through the merchant’s app. At first sight, the technological implementation of Delegated Authentication seems ambitious. However, deployment may be rapid and simple with the correct service provider and the broker model.