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PAYMENT OPTIMIZATION
Minimize the impact of PSD2 and grow your revenue
3DS can cause too much unnecessary friction — costing you legitimate sales. Fortunately, there’s a better way to manage risk, comply with SCA requirements, and leverage exemptions with Kount. We help maximize revenue opportunities while maintaining compliance.
PSD2 WITH KOUNT
How Kount helps you take advantage of exemptions
Kount works as the SCA requirement so that you can bypass step-up authentication protocols when available — reducing friction for your customers.
Kount marks a transaction as low risk.
Kount technology evaluates transaction data and determines if a transaction is low risk.
The transaction is sent to the payment gateway.
The payment gateway adds a TRA exemption flag to the transaction.
The transaction is sent to the acquirer for approval.
The acquirer approves the TRA exemption.
The transaction is sent to the issuer for final approval.
The issuer gives the final approval on the exemption. If the exemption is not accepted, the transaction is “soft-declined” and sent through SCA checks.
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BENEFITS
Balance regulations and exemptions with ease
Kount takes the guesswork out of managing risk, complying with regulations, and using exemptions. We work with both merchants and acquirers to deliver the maximum benefits possible.
For merchants
- Improve flexibility: Not every transaction should bypass SCA or be sent to 3DS. For example, if a transaction is risky, you can outright decline it.
- Leverage exemptions: Kount meets all SCA requirements, so you can leverage TRA exemptions for low-risk transactions.
- Grow revenue: Reduce customer friction and cart abandonment by using exemptions when possible. Approve more orders and earn more revenue.
For acquirers
- Manage risk profiles: Fight fraud upfront and keep risk low so that you can help your merchants leverage exemptions more often.
- Increase exemptions: Reduce your fraud basis points to unlock the maximum level of exemption capabilities, up to €500.
- Manage losses: Utilize both fraud prevention and chargeback management tools to minimize revenue loss from unauthorized transactions and first-party fraud.
WHAT MAKES KOUNT DIFFERENT
Why use Kount for PSD2 payment optimization
Kount is the only solution provider to offer benefits for both merchants and acquirers. Working with us maximizes the benefits for all.
Complete protection
Kount offers solutions for both pre-authorization fraud prevention and post-authorization chargeback management. So you can protect your business across the entire customer journey
Global data network
Our data network includes data points from thousands of merchants across the globe. Prevent chargebacks, manage losses, and minimize hits to your fraud basis points by leveraging Kount data.
Strong partnerships
Kount has strong relationships with acquirers that leverage our solutions to help their merchants. Utilize the knowledge and experience from these partnerships to develop a strategy that’s right for your business.
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GET STARTED TODAY
Experience the benefits of using Kount to optimize payments for PSD2
Schedule a call with our team, and we’ll show you how to drive more sales, reduce customer friction, and take advantage of TRA exemptions.
UPCOMING CHANGES
PSD3: the future of European payments
Upcoming changes to EU payments include the introduction of PDS3 — a directive that focuses on licensing and authorization for payments firms. This change is designed to increase security in the payments industry and bring the following benefits:
- Better open banking services.
- Streamlined authentication.
- Improved access to payment systems and accounts.
- Extended IBAN checks.
- Improved fraud prevention.
- Clearer framework for e-money.
QUESTIONS & ANSWERS
Frequently asked questions about PSD2
The revised Payment Services Directive (PSD2) is the second iteration of a European Union directive to regulate payment services and third-party payment service providers. Introduced in 2007, the directive was designed to make online payments in the European Economic Area (EEA) safer, increase consumer protection, and improve international ecommerce.
PSD2 is supplemented by the regulatory technical standards (RTS), which specify the requirements for Strong Customer Authentication (SCA) and common and secure open standards of communication.
PSD2 requires third-party payment services providers be authorized and regulated. Additionally, the directive requires businesses and financial institutions to have stronger fraud prevention checks. Part of that includes a mandatory requirement for Strong Customer Authentication.
Despite the UK leaving the European Union in 2020, PSD2 still applies. The UK government adopted PSD2 into national law to keep up with global PSD2 banking innovation.
No. PSD2 is only enforced in Europe. However, if US companies do business in Europe, they must comply with PSD2 regulations and security requirements.
PSD2 specifies that consumers have the right to use any third-party provider for online bank accounts and banking services. Because of this right, banks have to provide an open application programming interface (API) to share account details and transactions with third parties. This allows customers to use open banking options such as payment initiation services.
Yes, PSD2 is required in the European Union and the European Economic Area.
Banks and payment providers legally have to enforce PSD2. Failure to comply could result in the loss of transaction volume, fines, and revocation of licenses.
Yes, some transactions are exempt from the SCA enforcement when certain criteria are met. Those exemptions include:
- Contactless payments at POS.
- Unattended terminals for transport/parking.
- Trusted beneficiary.
- Recurring transactions.
- Credit transfers between accounts held by the same person.
- Low-value transactions.
- Secure corporate payments.
- Low-risk transactions.
- One-leg-out (acquirer or issuer is located outside of the EEA).
- Mail order/telephone order (MOTO).
- Merchant-initiated transaction (MIT).