Have you got a plan in place?

In 2015 the European Union passed The Second Payment Services Directive (PSD2) to regulate payment service providers within the EU. As we pass the halfway point of 2019 and anticipate a predicted eCommerce sale rate of 265% by 20211, there are new initiatives being introduced to further increase security.

What is it?

On the 14th of September this year Strong Customer Authentication (SCA), part of the EU’s Second Payment Services Directive (PSD2) will be enforced for all purchases. SCA introduces an additional, mandatory authentication step into the payment process to verify the identities of cardholders, subscribing and making purchases online.

Why is this important?

Today, an impressive 87% of all UK purchases are made online2 and an equally impressive 82% of the UK population have at least one subscription3.

SCA is likely to cause some annoyance amongst consumers and give rise to drop-out rates at point of sale for online purchases. This may sound frightening but in the long run, we should see fewer customer charge-backs, a reduction in operational costs and a decrease of fraudulent activity.

Currently, it is uncertain how SCA will affect the auto-renewal process for subscriptions. Our opinion at Hearts is that subscriptions that began prior to SCA will be forced to re-authenticate at the first renewal point post SCA. This should be concerning for some brands, who fear that their ‘sleeping subscribers’ will be woken by the re-authentication request and opt to end or change their subscription.

What’s the Hearts approach?

Whilst it may feel like the upcoming SCA enforcement will cause friction, as an agency that is on the front foot, we believe it provides an opportunity for your business to improve customer experience.

Embrace the change, demonstrate you care about security of customer transactions and select payment processing partners that make MFA seamless, much like Apple Pay or Google Pay’s use of biometrics.

Re-engage your sleeping subscribers in advance of their renewal date, reach out to them and remind your customers of why they first started using your service.

These new regulations will demand businesses to be forward thinking and flexible, but this isn’t something to be afraid of. It will improve consumer trust and encourage businesses to be more agile. Which in our opinion isn’t negative at all, but instead offers an opportunity.


Rosie Wishart, Advanced Insight Senior Analyst, Hearts & Science UK


(1) “Future of Ecommerce in 2019” report, Beeketing

(2) “Delivery Matters UK 2018” report, Royal Mail

(3) “A Nation Subscribed: 2018 State of the UK Subscription Economy” report, YouGov & Zuora