PSD2 - European legislation on payment services

The new European Directive on payment services, also called PSD2 (Payment Services Directive 2), in Italy is officially effective since 14th September 2019 and has led to new standards of authentication and security.

 @ Web: PSD2 (Payment Services Directive 2)

What is PSD2?

The PSD2 is a law that requires banks to guarantee authorized third parties to access the accounts and data in their possession. This means that bank clients can use authorized third-party providers to manage their finances and payment transactions. These providers are called TPP (Third Party Provider), and among them, of course, there is WuBook! To make payments from your online account, you will not need to go through your bank, but you can do everything through the new authorized third parties.

What is the purpose of PSD2?

It's simple! The PSD2 aims to:

  • make online payments more secure through new authentication methods
  • create an Open Banking model by sharing data with authorized third parties
  • simplify digital payment processes.

What does PSD2 involve in terms of payments?

With the new regulations, all e-commerce platforms must implement new authentication systems in their payment procedures to guarantee their customers total security. These systems are 3DS 2.0 (3D Secure) and SCA (Strong Customer Authentication). The purchaser's bank may refuse all transactions that do not meet these security requirements.

How was PSD2 implemented in WooDoo?

If you use WooDoo, there are two options:

  1. If you have set the reservation model ' Payment,' the customer must pay immediately. After entering the credit card details, the client will be sent back to his/her Bank's website at the end of the reservation. Here, for Strong Authentication, the client needs to enter a security code provided by his/her Bank (via SMS, app, email, etc.).
  2. If you have set the 'Real Time' or 'Free ' reservation model, customers will leave their card details as a guarantee. Therefore, you may need to verify these data or make a POS payment.
    You need to enter the customer's credit card data into your POS terminal by choosing MO/TO (Mail Order/Telephone Order). MO/TO payments does not require 3DS or SCA authentication.
    Generally, every POS terminal allows you to make MO/TO payments, but the service is not always active by default. To require activation, please contact your bank's support.

How was the PSD2 implemented in ZaK?

In order to comply with the PSD2 regulations, Zak offers the possibility to set up different methods to guarantee reservations, as the guest's credit card details are not sufficient anymore, except if the guest comes from outside the EU.

There are four methods and they can also be activated simultaneously:

  • Standard Credit Card: useful only for non-European customers
  • Credit Card with billing authorization: ZaK asks the guest for permission to debit the CC at a later date
  • Credit Card, Freezing Money: ZaK requests permission from the guest to temporarily block an amount
  • Payment: the guest can pay immediately via one of the gateways enabled by the hotelier (Stripe, PayPal, MercadoPago or Yandex)

For more information on Guarantee Methods and how they work, please read the following article:

↳ Doc: ZaK - Guarantee Methods for Reservations