Study • 17.01.2018

UK retailers unaware and unprepared in the face of Payment Services Directive

Report calls for retail technology vendors to educate retailers and help them innovate

Hand holding credit card over a laptop
Source: panthermedia.net / pressmaster

New research from independent technical consultancy Consult Hyperion and tech PR consultancy CCgroup, reveals that major UK retailers are unaware, unprepared and paralysed ahead of the Second Payment Services Directive (PSD2) set to go live on January 13th.

PSD2 requires banks to grant third-party providers – including retailers – access to a consumer’s bank account to initiate payments and source customer data in a regulated and secure way. Designed to promote competition and innovation in the payments industry, the regulation will have unintended consequences that will reshape the retail sector. With less than a week before the regulation comes into force, the research calls for retail technology vendors to intervene by educating the market and providing the solutions to capitalise on an array of opportunities.

The research ‘Unaware, unprepared and paralysed: retailer readiness for PSD2’ is based on responses from over thirty tier one (turnover above £500m) and tier two retailers (turnover between £30-£500m) in the UK.

Key findings:

Major retailers are in the dark on PSD2

  • 48% are unaware of PSD2
  • 67% aren’t ready to comply with PSD2
  • 32% aren’t aware of the effect on their business

PSD2 is perceived as a threat not an opportunity

  • Only 16% are seeking to ‘take advantage’ of the new regulation
  • Retailers don’t realise PSD2 will change their business 
  • 67% of retailers don’t think PSD2 will have much of an impact
  • Only 16% think PSD2 will have a major impact

Majority of retailers are paralysed 

  • On average only a third of retailers can confirm they’ll take action
  • Around 10% aren’t sure what they have planned
  • However, once PSD2 is explained retailers want to capitalise
  • 94% would like to reduce card fees
  • 74% want to reduce impact of fraud and data breaches

“The impending shift to “Open Banking” through the implementation of PSD2 is one of the hottest issues in banking and payments. However, it seems that merchants and the wider retail technology community are unaware of the regulation and its far-reaching ramifications,” said Tim Richards, Principal Consultant at Consult Hyperion and co-author of the report. “The use of two-factor authentication and access to customer bank accounts will allow retailers to dramatically lower card fees, mitigate fraud and limit the scope of data breaches. But arguably the biggest value is in access to consumer financial data that opens up new ways to do business.”

“With internet players like Amazon already investing in PSD2 related capabilities, if retailers don’t take up the charge, then someone else will,” concludes Richards. Encouragingly for retail technology vendors, when presented with use cases as to how PSD2 could make a positive impact on their business the vast majority of merchants are keen to capitalise on the opportunity. Furthermore, in excess of 60% of merchants do plan to act on PSD2 – they just need some direction.

“There is clearly a knowledge vacuum within retailers around PSD2 and the retail technology solutions available that enable merchants to take advantage of the opportunities it offers,” said Daniel Lowther, Head of Fintech at CCgroup and co-author of the report. “There is a window of opportunity for retail technology vendors to help merchants react to PSD2, while helping themselves win new business. But this window will close fast and current levels of awareness suggest that communications and marketing efforts to date have not resonated with merchants. This needs rapid and urgent attention from CMOs at retail technology vendors.”

The research “Unaware, unprepared and paralysed: Retailer readiness for PSD2” is now available for download.

Source: Consult Hyperion and CCgroup research

related articles:

popular articles:

Thumbnail-Photo: Goodbye paper receipts: All documents stored in one app...
16.05.2019   #epos systems #cashpoints, cash register, cash desk

Goodbye paper receipts: All documents stored in one app

What happens when the Receipt Provision Ordinance takes effect? We digitize!

They create a lot of work and endless waste: tons of paper receipts from cash registers end up with customers or the waste bin every day. In early 2020, all consumers must be given a purchase receipt in Germany. That’s what the law mandates. ...

Thumbnail-Photo: A new approach to cash handling
01.02.2019   #payment systems #services

A new approach to cash handling

Cash as a service

Thanks to the rapid expansion of e-commerce and Amazon, there is no doubt that a range of new card payment options are on the rise. At the same time, retailers are still handling enormous amount of cash daily because cash remains by far the most ...

Thumbnail-Photo: E-commerce: AI-powered translations revitalize business...
29.04.2019   #online trading #e-commerce

E-commerce: AI-powered translations revitalize business

Interview with Boris Zielonka, Director Marketing & Sales, Eurotext AG

Retailers who set up an online store can expand their business – especially if they create a multilingual content strategy.As a language and translation service, Eurotext AG supports retailers in this endeavor. From this conversation with ...

Thumbnail-Photo: Self-service sells
08.02.2019   #touch screens #kiosk terminals

Self-service sells

Kiosks represent an important part of retail’s future

Self-service is growing exponentially in all areas of retail, hotels, restaurants, healthcare and banking environments. Customers increasingly expect self-service technology options and traditional brick-and-mortar stores are no exception. Retailers ...

Thumbnail-Photo: Top 8 supply chain technology trends in 2019...
07.05.2019   #supply chain management (SCM) #artificial intelligence

Top 8 supply chain technology trends in 2019

Technologies that supply chain leaders simply cannot ignore

Gartner, Inc. has identified the top 8 supply chain technology trends in 2019.Gartner’s top strategic supply chain technology trends have broad industry impact, but have not yet been widely adopted. They might be experiencing significant ...

Thumbnail-Photo: APG Cash Drawer: new SMARTtill business development manager...
15.05.2019   #cash management #cash handling systeme

APG Cash Drawer: new SMARTtill business development manager

APG Cash Drawer announces hire of SMARTtill business development manager

APG Cash Drawer, a fast-growing global manufacturer of cash management solutions, announced today the addition of Tony Pusateri as SMARTtill Business Development Manager. ...

Thumbnail-Photo: Posiflex: interactive self-service kiosk systems for the POS...
21.02.2019   #kiosk terminals #self service terminals

Posiflex: interactive self-service kiosk systems for the POS

Going through changes and coming out stronger - Posiflex aquisitions

Thumbnail-Photo: Digital Signage Summit (DSS) Europe
07.05.2019   #digital signage #digitization

Digital Signage Summit (DSS) Europe

iXtenso readers receive a 30% ticket-discount!

The two-day event comprises a comprehensive mix of twin-track conference programme; hands-on workshops; exclusive presentations; numerous networking opportunities and a vendor and service supplier exhibition area.In 2019, DSS Europe returns to the ...

Thumbnail-Photo: Quality and great experiences at irma in Illum...
18.04.2019   #electronic shelf labels (ESL) #labels

Quality and great experiences at irma in Illum

A store with all the best

The customers wanted Irma back and they got that. After two years of absence, Irma has once again opened a store in the basement of ILLUM department store in the late summer of 2018. The new Irma store offers high quality and extra good experiences ...

Thumbnail-Photo: Online inventory management system
06.05.2019   #online trading #e-commerce

Online inventory management system

5 things e-commerce retailers should look for

In order to perform online efficiently as an Internet retailer, one needs to choose the most effective inventory management system. Its main features should include centralised user interface, full automation, automated stock checking and ...

Supplier

ROQQIO Commerce Solutions GmbH
ROQQIO Commerce Solutions GmbH
Harburger Schloßstraße 28
21079 Hamburg
iXtenso - Magazin für den Einzelhandel
iXtenso - Magazin für den Einzelhandel
Celsiusstraße 43
53125 Bonn
POSIFLEX GmbH
POSIFLEX GmbH
Flinger Broich 203
40235 Düsseldorf
Permaplay Media Solutions GmbH
Permaplay Media Solutions GmbH
Aschmattstr. 8
76532 Baden-Baden
SES-imagotag Deutschland GmbH
SES-imagotag Deutschland GmbH
Bundesstraße 16
77955 Ettenheim
APG Cash Drawer
APG Cash Drawer
4 The Drove
BN9 0LA Newhaven
Casio Europe GmbH
Casio Europe GmbH
CASIO-Platz 1
22848 Norderstedt
LANCOM Systems GmbH
LANCOM Systems GmbH
Adenauerstraße 20 / B2
52146 Würselen
Intenta GmbH
Intenta GmbH
Ahornstraße 55
09112 Chemnitz