Voice of the Industry

The art of balancing risk and customer experience expectations in payments

Friday 14 July 2023 07:10 CET | Editor: Raluca Ochiana | Voice of the industry

Now merchants have no way to verify that the card belongs to a customer. Theresia Mallia from Kindred Group reveals tips on how to balance risk and customer expectation in ecommerce payments.


During 2022, we saw PSD2 being rolled out in Europe; now, PSD3 is on the move. It is true that businesses and end-users can now benefit from improved protection with SCA and Open Banking. But I know there is so much more that can be done by the card and banking industry to go a step further. Especially around maximising the use of data that currently sits within the bank/ card schemes or card type payment options and cannot be maximised by merchants to avoid fraud/AML/third party deposits/underage and responsible issues/gaming implications in some industries.

What are the implications of this: At the moment, merchants have no way to verify that the card belongs to a customer. 3DS helps to confirm the client has control of the device/card but does not prove if the client is using their own card. This means that the client’s experience when using cards is not optimal, as in some industries they are still asked to provide documentation proving that the card belongs to them.

Verification of card ownership

For various wallets/bank payment solutions, it is possible to obtain customer information as part of the payment flow and match that with the customer’s name to identify third-party deposits. This is not the case for cards and we believe it is quite an important gap in card payment services.

So, what improved with PSD2?

When it comes to card deposits, a lot of merchants rely on the 3DS2/SCA part of PSD2. PSD2 allowed merchants to share their own customer’s name as part of the card transaction, by sharing additional customer details with card issuers (banks issuing the card), they will have the ability to check that the name is actually the card owner’s name. However, we have no visibility if this check is being done, or which issuers conduct these checks. 

What else needs to happen?

The verification of ownership of the card is not currently included under PSD2.

We know that card issuers ultimately have visibility of the customer details. Therefore, in theory, there could be tools offered by card schemes that will allow merchants to verify that the card belongs to the customer (verify account ownership).

Option 1: Card schemes can provide such ‘customer match/no match’ tools in collaboration with card issuers. Such products could help reduce fraud/money laundering risks through third-party deposits across various industries and should be implemented by card issuers.

Option 2: Since customer details are shared as part of card transactions with PSD2, issuers have visibility of such information and can reject transactions in case of third-party deposits (with the right error message returned so merchants can have visibility of why this transaction was rejected).

Important note: as we all know, mobile card/wallet payment options are becoming increasingly popular nowadays, it is important that the ‘verification of ownership’ requirement also extends to these card options.

For our industry, this measure is needed to help prevent fraud, money laundering, and address the responsible gambling problem in the right manner without hindrance to the overall customer experience. 

What about bank payments? 

Open Banking was a game changer. Through Open Banking merchants are able to verify if the client is using their own means of payment. 

However, there is more that can also be done for normal bank deposits/withdrawals, especially around banks in Europe, providing a Bank IBAN check feature. 

What is the bank IBAN name check feature? 

Another feature that could help combat fraud, third-party deposits, and money laundering risks is the BANK IBAN name check feature. We know such a feature exists in some EEA Countries like the Netherlands, France, and the UK but is not available in many other EU countries. For example, it does not yet exist in Belgium. 

Such a service will allow merchants to confirm that the payee’s name matches the name on the intended recipient’s bank account. The IBAN Name Check will help avoid misdirected payments and reduces push payment fraud. This will give us and our customers confidence that any payments being made are going to (or coming from) the intended beneficiary. 

How does it work: When receiving or sending payment, the merchant will send their own verified customer name + IBAN to the bank and the bank will send back ‘match’/ ‘no match’. The merchant will be able to decide whether to send payment or not based on this reply. 


The customer experience and having a seamless flow are important, as is mitigating risk related to fraud, money laundering, and harmful play. By promoting data sharing as part of a payment, it will be possible to check for third-party deposits in the background without impacting the client’s experience. This would ensure the customer has a superior customer experience both during and after a transaction happens as he won’t be asked for further documentation. 

Only merchants and payment options that are able to strike the right balance will survive, as the alternative is either an unacceptable risk level or a very cumbersome/manual verification process for the customer. 

In today’s digital age, this is possible in practice if all the parties involved in the payment ecosystem collaborate by providing verified payment options.

This editorial was initially published in the Financial Crime and Fraud Report 2023 which dives into the captivating world of fraud management, digital onboarding, and financial crime in the financial services industry. You can download your free copy here.

About Theresia Mallia

Theresia is passionate about how payment innovation is transforming the ecommerce landscape. She has worked in ecommerce for over 15 years. Theresia has been involved in launching large ecommerce sites all over Europe, the Middle East, and Asia and she decided to move to iGaming six years ago to specialise in payments and improve payments products at Kindred Group.



About Kindred Group

Kindred Group is a digital entertainment pioneer bringing together nine successful online gambling brands – forming one of the largest online gambling groups in the world. Our collective purpose is to continue to transform gambling by being a trusted source of entertainment that contributes positively to society.

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Keywords: financial crime, merchants, PSD2, Open Banking, AML, fraud management, banks, payment methods, IBAN, SCA
Categories: Fraud & Financial Crime
Companies: Kindred Group
Countries: World
This article is part of category

Fraud & Financial Crime

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