Apr 26 2019

Added complication in online payments

Easy payment for orders made in the Internet is the basic prerequisite for flourishing online commerce. However, new guidelines will also make payment transactions slightly more complicated for the furniture industry as of September.

The desired product has been selected, the delivery times are okay, now it's time to pay. Payment for goods when online shopping should ideally take place smoothly and with only a few clicks of the mouse. Thanks to broadly available methods like PayPal or payment with credit cards, consumers have no problems with or reservations about immediately paying for the products directly in the Internet-shop.

Encoded Internet connections, new authentication methods and the increased caution of the customers themselves mean that making payments online is for the most part secure. In the meantime, it is as self-explanatory as watching series on the computer.

However, everything might get a touch more complicated. As of September of this year, a new EU Directive will come into force that was passed in the previous year. The Revised Directive on Payment Services (PSD2) primarily revolves around making payment transactions in Europe even more secure, with in some cases negative consequences for traders.

This is because making payments will become somewhat more complicated on the whole. The most important change: better authentication for the payment transaction will be required as of the autumn. The magic word here is "strong authentication".

Stricter authentication required

This means that a simple password or a PIN code will no longer be adequate as proof that the person in front of the device is really the holder of the corresponding credit card or the provided bank account. This applies, for example, to the use of a credit card in the Internet: the card number, expiration date and the check digits will no longer be sufficient as of September.

An additional TAN or biometric authentication, like a fingerprint on the smartphone will then also be required. PayPal has also already announced that it will introduce a further security step to its payment solution; the details are being formulated.

The new EU Directive also has some positive aspects for online commerce in a general sense: financial service providers will be allowed to access the account information of customers, meaning that this is not only reserved for the house bank. Extra fees for credit card payments will also be prohibited.

Besides such ongoing changes, payment systems must also be suitable for future omnichannel measures. Thus, the payment service provider Wirecard has created a solution for the Inhofer furniture store, with which customers can pay the rest upon delivery at home after making a down payment in the store. Payment will in future become even more important, particularly for the networking of online and stationary commerce.

Customers want to make mobile payments

Another trend when shopping in the Internet that makes the use of simple, clearly structured payment systems even more important: goods are increasingly being purchased via mobile devices, on the smartphone or tablet. This requires especially stable processes that use little data and therefore don't immediately mean the termination of the order procedure in the event of a weak Internet connection.

This is because many consumers are lost forever when payment turns shopping into an obstacle course. Another important factor when paying is the agreement that the customer will be reimbursed the amount if they don't like the products, which generally happens less for furniture than in the textiles industry, for example. PayPal has a good argument at the ready with its "buyer protection".

In this context, customers who experience difficulties with sellers, for example, the failure to provide reimbursement for returns, can turn to PayPal and present their case with its help. When no agreement is reached, PayPal assumes responsibility for the open amount. Communication between customers and companies isn't directly related to the payment procedure,but quite a few furniture startups have nonetheless learned bitter lessons: points are subtracted when customers fail to find competent support either by mail or on the telephone.

German media reported on, among other issues, problems with the British online trader Made, which simply delivered the false items and then couldn't be reached. Such cases show that potential buyers are fussy and have little sense of humour when it comes to questions involving payment.

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