PSD2 requires every player in the EU that handles payments to make adjustments to ensure faster and more transparent transactions. The regulation opens customer data to third-party providers — as opposed to granting banks the right to silo and share it at will — and also gives FIs more requirements when it comes to customer authentication.
The regulation also aims to decrease the amount of middleware involved with online transactions, making it possible for third-party providers to move funds from customers’ accounts to those of merchants or others without needing approval from payment services. While this will improve the speed of online transactions, it also means that consumer authentication and data security are more important than ever. Identity information is also sent along with most payments data, which is something third-party providers can help speed along by smoothing the authentication process. This activity can also ramp up the possibility of fraud for banks or processors that are not yet compliant, however. Additionally, FIs, payment services and consumers need to rethink where they stand when it comes to successfully completing online payments.
FIs across Europe are racing to upgrade their payment systems to accommodate PSD2, and the region’s regulatory agencies are expanding on the directive to make online transactions more transparent. The FCA, for instance, is outlining PSD2’s rules and exemptions, creating an important pathway for FIs as they set up new payment ecosystems.
What PSD2 means for online payments and authentication
PSD2 is a new way to treat data that removes banks as the sole keepers of the payment information that typically accompanies consumers’ financial histories. Giving third-party providers access to this data will affectthe speed of transactions and the roles of the banks involved in them, which could have a profound influence on the way that open banking develops in the EU.
Under PSD2, third-party AISPs will be able to give users a clear view of their payment histories by utilizing the financial information that was typically siloed by banks. Third-party PISPs will have access to payment accounts, enabling them to initiate transactions with authentication from only the customer, reducing the need for security measures from the other players in the process, such as the merchant, bank and card provider.
This regulation pushes banks’ roles to the side, creating a much stronger sense of give-and-take between consumers and third-party providers. Banks are still critical for PSD2-compliant transactions, though, as they are providing a majority of the key data that makes them possible. Moreover, all of this depends on knowing that the consumer in question actually requested the transaction, which puts the need for complex and concrete authentication methods to the forefront. This is where regulatory agencies like the FCA come in.
FCA exemptions and online authentication
One of the prime tenets of PSD2 is enabling faster online payments, but the directive also makes consumers more active participants when it comes to their online data.
To assist businesses and consumers in this aspect, the FCA released a few notes on the process, as well as exemptions to PSD2’s authentication requirements. The FCA detailed the technical standards that are expected of payment providers under the directive, all of which emphasize the need for transparent communication by every player involved in an online transaction.
Additionally, the FCA outlined guidelines for two-factor authentication — a method that is frequently used to verify that customers are who they say they are. Payment providers take responsibility for payment security under PSD2, so authentication needs to be bulletproof. To
authenticate users, providers must verify something known only by them, or something that only they can provide, like a biometric identifier. The two factors that are chosen by payment providers need to be independent of each other to be considered an acceptable form of authentication.
Exceptions to these authentication methods include contactless payments — a popular payment method in the U.K., where PSD2 has already been enacted. Contactless payments authenticate customers when their cards are not present using a messaging protocol known as EMV 3-D Secure (3DS). This protocol conditionally mandates that consumer identity data be passed through along the 3-D Secure payment flow,
which allows consumers to authenticate themselves through their card issuer when making card-not-present purchases. Merchants and PSP providers can then leverage third-party identity verification providers to verify the identity data thus allowing them to remain compliant with PSD2 authentication requirements.
What PSD2 means for cross-border payments
Enabling these authentication methods isn’t easy, especially as payment players in the EU are still figuring out where they fit into this new, open banking ecosystem.
The goal of PSD2 is to create more transparent online payments, where data is easily shared between banks, third-party providers and retailers to facilitate safe and secure money movement. PSD2’s role in this open banking ecosystem is sure to be essential, although it’s too early to determine the scope of the directive’s impact — that’s going to depend on how well banks and payment providers adapt.
The pandemic didn’t kill the movie theater, but it did make people fall in love with streaming services. To remain competitive, the entire movie and streaming experience is undergoing an epic, Marvel superhero-like mutation.
Immersive film experiences that simulate reality have come to lure you away from your comfy couch and deep into the stories of your favorite movies.
We’re not just talking about 3D glasses or IMAX here. These cutting-edge experiences incorporate virtual reality (VR), augmented reality (AR) and interactive elements to create a multi-sensory adventure. You don’t just watch a movie — you seem to live it, breathe it and maybe even taste it.
Yes, attempts at Smell-O-Vision, such as the 1960 film “Holiday in Spain” (aka “Scent of Mystery”) were decidedly less than successful, but technology has evolved light years since then and industry insiders believe immersive movies could be the key to revitalizing the theater industry in a post-pandemic world.
“Immersive experiences tap into our innate desire for novelty and excitement,” says Sarah Chen, a media analyst at TechVision Research. “They provide a sense of adventure and discovery that appeals to audiences seeking new forms of entertainment.”
Think of it like a combination of playing make-believe when you were little and a Universal Studios theme park ride.
For example, Particle Ink’s “Speed of Dark” in Las Vegas offers a mixed-reality experience where guests interact with the physical environment and view live performances, blurring the lines between reality and fiction. Want to be Bond, as in James Bond? There’s a company that will help you do that in style, as well as with other film favorites.
And don’t think for a second that the streaming services are just going to sit on the sidelines and watch this happen. Netflix recently launched its “Stranger Things: The Experience” in select cities. Fans can explore recreated sets from the popular show, interact with characters and solve puzzles in a live, immersive environment.
And don’t forget about “Bridgerton” and its live concerts, teas and the Queen’s Ball experiences hosted by select cities including New York, London, Chicago, Atlanta, Los Angeles and Minneapolis. You may just want to spill a little tea at one.
PYMNTS Intelligence data also shows consumers love experiences, whether when traveling or shopping — and brands are noticing. A report last year, which drew on a survey of 4,285 U.S. consumers, showed that the highest earners are the most likely to splurge on experiences.
Brands and retailers, including Nike, Mattel, Target and Nordstrom, are also getting in on the experience craze, hosting live events and interactive experiences.
Speaking of phenomena like “Stranger Things” and “Bridgerton” that made us stay home to be entertained, “Imagine transforming your living room into a virtual theater [with VR and AR technologies]. The possibilities are limitless,” says Chen.
The technology driving these experiences can drive filmmakers to up their game. Eugene Chung, the director of the acclaimed VR film “Allumette,” said, “VR allows us to create worlds where viewers don’t just see the story unfold — they feel it.”
But let’s be realistic; there are some very big obstacles to widespread adoption of immersive cinema experiences. They’re expensive to produce, and some projects will need specialized venues. You can’t exactly fit a dinosaur-infested jungle in your local multiplex. Plus, there’s always the risk of motion sickness.
And there will be critics who argue that overly immersive experiences detract from the art of traditional storytelling. But who needs plot and character development when you can have explosions so intense that you feel the heat on your face?
As the line between audience and participant in the cinematic plot continues to blur, one thing is clear: The movie-going experience of tomorrow may be vastly different from what we know today.
Who knows? In a few years, you might be able to star in your own blockbuster, defeat the villain, and save the world — all before dinner time. Just remember to silence your phones, keep your hands and feet inside the virtual reality at all times, and whatever you do, don’t feed the digital monsters.
