Zalando introduces two-factor payment authentication

Zalando has implemented two-factor authentication for customers paying for goods online.

The eCommerce retailer has partnered with Adyen to encrypt customer payment data and meet the revised Payment Services Directive (PSD2) which will come into force on September 14. Zalando claims to be one of the first companies to comply with the EU Directive.

Zalando customers will now have to provide two different authentication methods in order to pay online – for example, a password, a transaction authentication number (TAN), or a fingerprint. In an example provided on Zalando’s corporate website, the customer was sent a message from their bank to approve the process. By clicking on the message, the customer was able to confirm the payment with their fingerprint, and after validation they are automatically redirected back to Zalando’s website to complete the order.

"Customer focus in combination with technology and speed are part of our DNA. We are therefore pleased to be one of the first companies to successfully implement SCA together with Adyen,” said Kai-Uwe Mokros, MD payments at Zalando.

Alexa von Bismarck, country manager for Adyen in Germany, added: “We're delighted to work with Zalando as it takes a pioneering role in implementing Strong Customer Authentication. For Zalando and Adyen, our top priority is to make sure that customers can pay securely online, with a great shopping experience. This is exactly what Adyen's 3DS 2 solution can guarantee."

The retail industry has raised concerns that the industry is unprepared for PSD2 changes. Many are worried about basket abandonment when complying with PSD2 regulations, especially because of the additional steps required by customers which may cause abandon their purchases. But others argue as long as the payment experience is “frictionless” customers will appreciate the added security measures.