PSD2 Compliance Update

@ashleykaryl Socks are very important - mine are made from milk (see compression.solutions) so it is very important how they are handled and stored! I do agree its about getting the money though with PSD2 compliance.

@ashleykaryl It looks like Google Pay (GP) donā€™t want to get involved in Europe then! :-) Also RW users also use GP through their stripe accounts so these will be affected too. (https://stripe.com/docs/google-pay)

There could be a lot of potential work here for web designers if they can work out how to resolve this. I bet there will also be some drama for web designers who build sites recently. Iā€™m especially relieved now that I walked away from a job 6 months ago for an artist who wanted to sell prints online. He wanted the whole thing built through some online system run by BT.

This is going to go two waysā€¦

Either the Sept date will end up as a soft target. Or, the processing companies will get it sorted.

If things not being readied in time only caused headaches and financially the retailers, Iā€™d say weā€™re heading for a cluster fuck. But, if the retailers canā€™t process card transactions that will hurt the banks as their commissions will get hit, so itā€™ll be one of my options above

I am also pretty sure the banks will find a way through this. Just a minute ago I received an email from my credit card provider, saying they have released apps for Android and iPhone that help users verify their identity and there will be other options to identify by SMS or Pin sentry. As steveb says the banks wonā€™t want to lose out on this, so solutions will emerge.

This would be a complete disaster if we have lines 50 meters long with people having to verify their purchases as the supermarket.

I wonder if Google Authenticator will perhaps offer a solution.

Iā€™m yet to read the actual regs, but once Iā€™ve read them Iā€™m sure some pretty simple solutions will present themselves.

Looking at the barebones of it, the regs appear to require a 2nd level means for users to identify themselves. My understanding is that this is either via something they have (smartphone the obvious), something they are (fingerprint scanner, also requiring a phone) or a third, which I canā€™t recall.

The sole purpose of this is to essentially extend the chip and pin* concept to online purchases, without having to use your pin. While this can be made super complex, itā€™s really a very simple process, and no doubt the processors (who have the most to lose if this goes tits up) will come up with a solution.

The downside I suspect that any simple solution will be monetised. So expect commissions for card processing to go up.

  • Chip and pin: Another prime example of something that went totally tits up, but the sky didnā€™t fall in: When that was being touted, there were warnings everywhere saying if you didnā€™t upgrade your in-store hardware you would no longer be able to take card payments. As it was, even those of us who did upgrade the hardware by way of more expensive card terminal contracts, we shouldnā€™t have bothered: In the end the banks were well behind the curve and when the change over day came no one actually had a chip enabled card, so everyone continues to sign for things. Once the initial fuzz died down and users got there new cards the price of the terminals dropped and some of us got stuff with overpriced terminals for the remainder of the contract.

Now, god knows how many years on, I know of retailers who still donā€™t have chip and pin terminals yet still take cards the old fashioned way. Of course, they get screwed by the card machines with massive transaction fees, but thatā€™s another story.

The more I think on this, the more i think the solution is going to be things like Google authenticator. Itā€™s the perfect solution, and because Google will have worked out how to intercept the data, or at the very least will be able to record who is buying form where, itā€™ll most likely be free. Iā€™ve noticed a lot of sites have started encouraging itā€™s use recently (instead of giving them a mobile number, which I refuse to do), Stripe being one, so I wonder if they are trialing it with their own users?

I remember the old days when retailers would place the card underneath three sheets with a carbon copy and rollover a press, before keeping one copy for themselves, another for the client and a third for the credit card company. The card would generally be handed back in a buckled state and become completely unusable. The client had to sign for confirmation of the transaction.

Ahh the good old days! I still have my old my last machine and some old carbons somewhere in my lockup.

I got about Ā£200 of kit from Halfords for free once, as someone ran my card thru the Amex machine not the Visa one. I only noticed it a few weeks later when emptying my pockets and noticing the slip. Checked the statement for months afterwards and it never appeared.

Dread to think how much stuff I gave away from my old shop though by making similar errors.

The EUā€™s intention is to extend the rules about digital downloads to physical products as well. Typical EU nonsense. To be fair to the EU, it compares quite well with the US. Iā€™ve just had to fill in umpteen state sales tax documents. Iā€™m surprised they have any businesses left.

For most small businesses in the U.S. you never reach the sales threshold to collect and file state sales tax for states you donā€™t operate a physical location in.

$10,000 sales threshold

  • Oklahoma
  • Pennsylvania

all other states have a $100,000 or larger sales thresholds

1 Like

The EU sets a zero threshold for EU Vat on digital downloads, so you are expected to pay tax, even if your business is losing money and nowhere near the normal threshold. Adding tax at the checkout depresses sales, so in practice this is generally absorbed by the seller.

Theyā€™ve just changed that, but if the UK leaves the EU UK sellers to the EU will still have no minimum. Still, itā€™s worth it to get out, I think.

The contrary is true if you are selling B2B - a VAT registered business will always prefer a VAT invoice so that they can offset the 20%

The price is listed as inclusive of VAT, but they can still fill in their VAT details at the checkout and reclaim the VAT. For the rest itā€™s a sales killer if VAT is added.

You obviously live in a different world to me then. Everything I buy has VAT on it other than VAT exempt items. Very occasionally I may buy something from a business that is too small to be VAT registered but it really is a tiny fraction of purchases.

In the RW world, the only problem is that there is an unfair advantage to people selling illegally without VAT because they know they wonā€™t get caught. Their products are thus 20% cheaper.

No I donā€™t live in a different world and I was VAT registered for many years, working with UK and international clients, both inside and outside the EU. My point is that if you quote a price on a web page + VAT it really hurts sales to general consumers, especially if added at the checkout. Consumers outside the EU are not charged VAT for obvious reasons.

Predominantly retail sales should always be inc VAT - the VAT component will then be itemised in the basket. Iā€™m sorry but this just seems normal to me.

This is even hitting people who work at home from a kitchen table and might want to raise a few quid from selling knitting patterns or something, just to make ends meet. These people probably fall below the income tax threshold with their earnings, let alone the normal VAT turnover threshold.

I agree that it is an unjust overkill on small businesses as a result of the shady practices of Amazon, Apple and Google etc.

My only point is that if all competing businesses are having to charge VAT then it is a level playing field. The consumer only gets a choice to pay 20% less if suppliers outside the EU are selling illegally into the market - as is the case with RW.

Your argument therefore is that the market cannot accept a 20% increase in the price of these minority supplier goods which may well be the case and is a fair point. The law has however been in place for over 4 years now (and there is allegedly an exemption of Ā£8.8k in the UK since Jan), time to start sending the knitting patterns in the post or stop and do something else as it is not going away.

1 Like