The Second Payment Services Directive (PSD2) is part of the European Commission’s efforts to create a safer, more innovative payments environment in Europe. The legislation, which builds on the groundwork laid by the original payment directive in 2009, has significant mandates coming into force in September 2019.
With rising concern surrounding the increasing levels of ecommerce fraud in Europe, one of the key aims of the new regulation is to help ensure that payment procedures are safe and secure. Consumers must feel confident that paying for goods online is just as secure as physically visiting a bricks and mortar store.
As regulations try to keep pace with the rapidly expanding ecommerce industry, merchants must respond with preparation and agility in order to remain competitive. However, PSD2 is not the only major trend in European ecommerce which is shaping how consumers shop and pay for their products.
UK market powers ahead
The UK remains the dominant force in European ecommerce, with a market worth €178.5bn*, a figure that dwarfs its next-biggest rivals, France (€81.7bn) and Germany (€73bn). Aided by its advantage of language – much of the technology powering ecommerce comes from the US – and the country’s early and widespread use of debit cards, the UK’s healthy lead in ecommerce has widened in recent years, having grown by double-digit rates each year.
However, growth in these established markets is now stabilising and the impact of Brexit is an unknown factor for 2019.
The online shopping sectors in Germany, France and the UK are due to rise at a compound annual growth rate (CAGR) of approximately 7-10% between 2017 and 2021. Other, less heralded, markets now represent compelling opportunities: of the 18 countries surveyed in J.P. Morgan’s Payment Trends – Global Insights Reports, 10 are set to enjoy double-digit Business 2 Consumer (B2C) ecommerce market expansion between now and 2021, with the Czech Republic (16% CAGR), Italy (14%) and Spain (13.5%) ranking highest for predicted growth.
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