A new European-wide study has revealed the extent of disparity between retailers’ and online shoppers’ awareness of the second Payment Services Directive (PSD2).

Riskified surveyed 2,000 consumers and 200 retailers - with respondents evenly split across the UK, Germany, France and Spain - finding that 88 per cent of retailers believed that consumers were ‘somewhat’ or ‘very aware’ of PSD2. However, 76 per cent of consumers reported that they haven’t even heard of it.

The implementation of the regulation is set to add new security measures for all online transactions over €30, meaning that for most online transactions, consumers will need to undergo multi-factor authentication to verify their identity – such as entering a code received via their mobile phone, providing biometric data such as a fingerprint, or other forms of authentication.

In the UK specifically, the research revealed that a third of consumers would cancel their online purchase and go elsewhere if presented with PSD2’s identity verification requirements, while 18 per cent of retailers still haven’t taken any steps to minimise the negative impact of PSD2 on their online sales.

Eido Gal, co-founder and chief executive of e-commerce solution provider Riskified, said: “We’re always in favour of better security, but it shouldn’t have to be a trade-off with the customer experience.

“Unfortunately, some of PSD2’s security requirements could have a detrimental effect on online shopping, leading to unhappy customers and cart abandonment.”

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