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• 7 Benefits Segmentation Examples + How to Get Started

  26 mars 2024, par Erin

  Every copywriter knows the importance of selling a product’s benefits, not its features. So why should your marketing efforts be different ?

  Answer : they shouldn’t.

  It’s time to stop using demographic or behavioural traits to group customers and start using benefits segmentation instead.

  Benefits segmentation groups your customers based on the value they get from your product or service. In this article, we’ll cover seven real-life examples of benefits segmentation, explain why it’s so powerful and show how to get started today.

  What is benefits segmentation ?

  Benefits segmentation is a way for marketers to group their target market based on the value they get from their products or services. It is a form of customer segment marketing. Other types of market segmentation include :

  • Geographic segmentation
  • Demographic segmentation
  • Psychographic segmentation
  • Behavioural segmentation
  • Firmographic segmentation

  Customers could be the same age, from the same industry and live in the same location but want drastically different things from the same product. Some may like the design of your products, others the function, and still more the price. 

  Whatever the benefits, you can make your marketing more effective by building advertising campaigns around them.

  Why use benefits segmentation ?

  Appealing to the perceived benefits of your product is a powerful marketing strategy. Here are the advantages of you benefit segmentation can expect :

  

  More effective marketing campaigns

  Identifying different benefits segments lets you create much more targeted marketing campaigns. Rather than appeal to a broad customer base, you can create specific ads and campaigns that speak to a small part of your target audience. 

  These campaigns tend to be much more powerful. Benefits-focused messaging better resonates with your audience, making potential customers more likely to convert.

  Better customer experience 

  Customers use your products for a reason. By showing you understand their needs through benefits segmentation, you deliver a much better customer experience — in terms of messaging and how you develop new products. 

  In today’s world, experience matters. 80% of customers say a company’s experience is as important as its products and services.

  Stronger customer loyalty

  When products or services are highly targeted at potential customers, they are more likely to return. More than one-third (36%) of customers would return to a brand if they had a positive experience, even if cheaper or more convenient alternatives exist.

  Using benefits segmentation will also help you attract the right kind of people in the first place — people who will become long-term customers because your benefits align with their needs. 

  Improved products and services

  Benefits segmentation makes it easier to tailor products or services to your audiences’ wants and needs. 

  Rather than creating a product meant to appeal to everyone but doesn’t fulfil a real need, your team can create different ranges of the same product that target different benefits segments. 

  Higher conversion rates

  Personalising your pitch to individual customers is powerful. It drives performance and creates better outcomes for your target customer. Companies that grow faster drive 40 per cent more revenue from personalisation than their slower-growing counterparts.

  When sales reps understand your product’s benefits, talking to customers about them and demonstrating how the product solves particular pain points is much easier. 

  In short, benefits segmentation can lead to higher conversion rates and a better return on investment. 

  7 examples of benefits segmentation

  Let’s take a look at seven examples of real-life benefits segmentation to improve your understanding :

  Nectar

  Mattress manufacturer Nectar does a great job segmenting their product range by customer benefits. That’s a good thing, given how many different things people want from their mattress. 

  It’s not just a case of targeting back sleepers vs. side sleepers ; they focus on more specific benefits like support and cooling. 

  

  Take a look at the screenshot above. Nectar mentions the benefits of each mattress in multiple places, making it easy for customers to find the perfect mattress. If you care about value, for example, you might choose “The Nectar.” If pressure relief and cooling are important to you, you might pick the “Nectar Premier.”

  24 Hour Fitness

  A gym is a gym is a gym, right ? Not when people use it to achieve different goals, it’s not. And that’s what 24 Hour Fitness exploits when they sell memberships to their audience. 

  As you can see from its sales page, 24 Hour Fitness targets the benefits that different customers get from their products :

  

  Customers who just care about getting access to weights and treadmills for as cheap as possible can buy the Silver Membership. 

  But getting fit isn’t the only reason people go to the gym. That’s why 24 Hour Fitness targets its Gold Membership to those who want the “camaraderie” of studio classes led by “expert instructors.”

  Finally, some people value being able to access any club, anywhere in the country. Consumers value flexibility greatly, so 24 Hour Fitness limits this perk to its top-tier membership. 

  Notion

  Notion is an all-in-one productivity and note-taking app that aims to be the only productivity tool people and teams need. Trying to be everything to all people rarely works, however, which is why Notion cleverly tweaks its offering to appeal to the desires of different customer segments :

  

  For price-conscious individuals, it provides a pared solution that doesn’t bloat the user experience with features or benefits these consumers don’t care about.

  The Plus tier is the standard offering for teams who need a way to collaborate online. Still, there are two additional tiers for businesses that target specific benefits only certain teams need. 

  For teams that benefit from a longer history or additional functionality like a bulk export, Notion offers the Business tier at almost double the price of the standard Plus tier. Finally, the Enterprise tier for businesses requires much more advanced security features. 

  Apple

  Apple is another example of a brand that designs and markets products to customers based on specific benefits.

  

  Why doesn’t Apple just make one really good laptop ? Because customers want different things from them. Some want the lightest or smallest laptop possible. Others need ones with higher processing power or larger screens.

  One product can’t possibly deliver all those benefits. So, by understanding the precise reasons people need a laptop, Apple can create and market products around the benefits that are most likely to be sold. 

  Tesla

  In the same way Apple understands that consumers need different things from their laptops, Tesla understands that consumers derive different benefits from their cars. 

  It’s why the company sells four cars (and now a truck) that cover various sizes, top speeds, price points and more. 

  

  Tesla even asks customers about the benefits they want from their car when helping them to choose a vehicle. By asking customers to pick how they will use their new vehicle, Tesla can ensure the car’s benefits match up to the consumers’ goals. 

  Dynamite Brands

  Dynamite Brands is a multi-brand, community-based business that targets remote entrepreneurs around the globe. But even this heavily niched-down business still needs to create benefit segments to serve its audience better. 

  It’s why the company has built several different brands instead of trying to serve every customer under a single banner :

  

  If you just want to meet other like-minded entrepreneurs, you can join the Dynamite Circle, for example. But DC Black might be a better choice if you care more about networking and growing your business.

  It’s the same with the two recruiting brands. Dynamite Jobs targets companies that just want access to a large talent pool. Remote First Recruiting targets businesses that benefit from a more hands-on approach to hiring where a partner does the bulk of the work.

  Garmin

  Do you want your watch to tell the time or do you want it to do more ? If you fall into the latter category, Garmin has designed dozens of watches that target various benefits.

  

  Do you want a watch that tracks your fitness without looking ugly ? Buy the Venu. 

  Want a watch designed for runners ? Buy the Forerunner. 

  Do you need a watch that can keep pace with your outdoor lifestyle ? Buy the Instinct. 

  Just like Apple, Garmin can’t possibly design a single watch that delivers all these benefits. Instead, each watch is carefully built for the target customer’s needs. Yes, it makes the target market smaller, but it makes the product more appealing to those who care about those benefits.

  How to get started with benefits segmentation

  According to Gartner, 63% of digital marketing leaders struggle with personalisation. Don’t be one of them. Here’s how you can improve your personalisation efforts using benefits segmentation. 

  Research and define benefits

  The first step to getting started with benefit segmentation is understanding all the benefits customers get from your products. 

  You probably already know some of the benefits, but don’t underestimate the importance of customer research. Hold focus groups, survey customers and read customer reviews to discover what customers love about your products. 

  Create benefit-focused customer personas

  Now you understand the benefits, it’s time to create customer personas that reflect them. Group consumers who like similar benefits and see if they have any other similarities. 

  Price-conscious consumers may be younger. Maybe people who care about performance have a certain type of job. The more you can do to flesh out what the average benefits-focused consumer looks like, the easier it will be to create campaigns. 

  Create campaigns focused on each benefit

  Now, we get to the fun part. Make the benefit-focused customer personas you created in the last step the focus of your marketing campaigns going forward. 

  Don’t try to appeal to everyone. Just make your campaigns appeal to these people.

  Go deeper with segmentation analytics

  The quality of your benefit segmentation strategy hinges on the quality of your data. That’s why using a an accurate web analytics solution like Matomo to track how each segment behaves online using segmentation analytics is important.

  

  This data can make your marketing campaigns more targeted and effective.

  Benefits segmentation in practice

  Let’s say you have an e-commerce website selling a wide range of household items, and you want to create a benefit segment for “Tech Enthusiasts” who are interested in the latest gadgets and cutting-edge technology. You want to track and analyse their behaviour separately to tailor marketing campaigns or website content specifically for this group.

  1. Identify characteristics : Determine key characteristics or behaviours that define the “Tech Enthusiasts” segment. 

  This might include frequent visits to product pages of the latest tech products, site searches that contain different tech product names, engaging with tech-specific content in emails or spending more time on technology-related blog posts.

  One quick and surefire way to identify characteristics of a segment is to look historically at specific tech product purchases in your Matomo and work your way backwards to find out what steps a “Tech Enthusiast” takes before making a purchase. For instance, you might look at User Flows to discover this.

  

  2. Create segments in Matomo : Using Matomo’s segmentation features, you can create a segment that includes users exhibiting these characteristics. For instance :

  • • Segment by page visits : Create a segment that includes users who visited tech product pages or spent time on tech blogs.

  

  • • Segment by event tracking : If you’ve set up event tracking for specific actions (like clicking on “New Tech” category buttons), create a segment based on these events.
    • Combine conditions : Combine various conditions (e.g., pages visited, time spent, specific actions taken) to create a comprehensive segment that accurately represents “Tech Enthusiasts.”

  3. Track and analyse : Apply this segment to your analytics data in Matomo to track and analyse the behaviour of this group separately. Monitor metrics like their conversion rates, time spent on site or specific products they engage with.
  4. Tailor marketing : Use the insights from analysing this segment to tailor marketing strategies. This could involve creating targeted campaigns or customising website content to cater specifically to these users.

  Remember, the key is to define criteria that accurately represent the segment you want to target, use Matomo’s segmentation tools to isolate this group, and effectively derive actionable insights to cater to their preferences or needs.

  Try Matomo for Free

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  Track your segmentation efforts 

  Benefits segmentation is a fantastic way to improve your marketing. It can help you deliver a better customer experience, improve your product offering and help your sales reps close more deals. 

  Segmenting your audience with an analytics platform lets you go even deeper. But doing so in a privacy-sensitive way can be difficult. 

  That’s why over 1 million websites choose Matomo as their web analytics solution. Matomo provides exceptional segmentation capabilities while remaining 100% accurate and compliant with global privacy laws.

  Find out how Matomo’s insights can level up your marketing efforts with our 21-day free trial, no credit card required.

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• What Is Ethical SEO & Why Does It Matter ?

  7 mai 2024, par Erin

  Do you want to generate more revenue ?

  Then, you need to ensure you have a steady stream of traffic flowing to your site.

  Search engines like Google, Bing and Yahoo are powerful mediums you can use to scale your business.

  Search engine optimisation (SEO) is the process of creating search engine-friendly content to draw in traffic to your website. But, if you aren’t careful, you could be crossing the line of ethical SEO into unethical SEO.

  In this article, we break down what ethical SEO is, why it’s important in business and how you can implement effective SEO into your business while remaining ethical.

  Let’s begin.

  What is ethical SEO ?

  Since the early days of the internet and search engines, business owners and marketers have tried using all kinds of SEO tactics to rank atop the search engines for relevant keywords.

  The problem ?

  Some of these practices are ethical, while others aren’t.

  What exactly is ethical SEO ?

  It’s the practice of optimising your website’s rankings in search engines by following search engine guidelines and prioritising user experience.

  

  Ethical SEO is also referred to as “white hat SEO.”

  On the other hand, businesses that break search engine rules and guidelines to “hack” their way to the top with faulty and questionable practices use unethical SEO, or “black hat SEO.”

  Ethical SEO aims to achieve higher rankings in search engines through sustainable, legitimate and fair methods.

  Black hat, or unethical SEO, aims to manipulate or “game” the system with deceptive strategies to bypass the search engine’s guidelines to rank higher.

  The two core branches of ethical SEO include :

  1. Strategies that align with search engine guidelines.
  2. Accessibility to broad audiences.

  Some examples of ethical SEO principles include :

  • Natural link building
  • Compliance with search engine guidelines
  • Establishing great user experiences
  • Creating reader-focused content

  By sticking to the right guidelines and implementing proper SEO practices, businesses can establish ethical SEO to generate more traffic and grow their brands.

  8 ethical SEO practices to implement

  If you want to grow your organic search traffic, then there’s no doubt you’ll need to have some SEO knowledge.

  While there are dozens of ways to “game” SEO, it’s best to stick to proven, ethical SEO techniques to improve your rankings.

  Stick to these best practices to increase your rankings in the search engine results pages (SERPs), increase organic traffic and improve your website conversions.

  

  1. Crafting high-quality content

  The most important piece of any ethical SEO strategy is content.

  Forget about rankings, keywords and links for a second.

  Step back and think about why people go to Google, Bing and Yahoo in the first place.

  They’re there looking for information. They have a question they need answered. That’s where you can come in and give them the answer they want. 

  How ? In the form of content.

  The best long-term ethical SEO strategy is to create the highest-quality content possible. Crafting high-quality content should be where you focus 90% of your SEO efforts.

  2. Following search engine guidelines

  Once you’ve got a solid content creation strategy, where you’re producing in-depth, quality content, you need to ensure you’re following the guidelines and rules put in place by the major search engines.

  This means you need to stay compliant with the best practices and guidelines laid out by the top search engines.

  If you fail to follow these rules, you could be penalised, your content could be downgraded or removed from search engines, and you could even have your entire website flagged, impacting your entire organic search traffic from your site.

  You need to ensure you align with the guidelines so you’re set up for long-term success with your SEO.

  3. Conducting keyword research and optimisation

  Now that we’ve covered content and guidelines, let’s talk about the technical stuff, starting with keywords.

  In the early days of SEO (late 90s), just about anyone could rank a web page high by stuffing keywords all over the page.

  While those black hat techniques used to work to “game” the system, it doesn’t work like that anymore. Google and other major search engines have much more advanced algorithms that can detect keyword stuffing and manipulation.

  Keywords are still a major part of a successful SEO strategy. You can ethically incorporate keywords into your content (and you should) if you want to rank higher. 

  Your main goal with your content is to match it with the search intent. So, incorporating keywords should come naturally throughout your content. If you try to stuff in unnecessary keywords or use spammy techniques, you may not even rank at all and could harm your website’s rankings.

  4. Incorporating natural link building

  After you’ve covered content and keywords, it’s time to dive into links. Backlinks are any links that point back to your website from another website.

  These are a crucial part of the SEO pie. Without them, it’s hard to rank high on Google. They work well because they tell Google your web page or website has authority on a subject matter.

  But you could be penalised if you try to manipulate backlinks by purchasing them or spamming them from other websites.

  Instead, you should aim to draw in natural backlinks by creating content that attracts them.

  How ? There are several options :

  • Content marketing
  • Email outreach
  • Brand mentions
  • Public relations
  • Ethical guest posting

  Get involved in other people’s communities. Get on podcasts. Write guest posts. Connect with other brands. Provide value in your niche and create content worth linking to.

  5. Respecting the intellectual property of other brands

  Content creation is moving at lightspeed in the creator economy and social media era. For better or for worse, content is going viral every day. People share content, place their spin on it, revise it, optimise it, and spread it around the internet.

  Unfortunately, this means the content is sometimes shared without the owner’s permission. Content is one form of intellectual property (IP). 

  If you share copyrighted material, you could face legal consequences.

  6. Ensuring transparency

  Transparency is one of the pillars of ethical marketing.

  If you’re running the SEO in your company or an agency, you should always explain the SEO strategies and tactics you’re implementing to your stakeholders.

  It’s best to lean on transparency and honesty to ensure your team knows you’re running operations ethically.

  7. Implementing a great user experience

  The final pillar of ethical SEO practices is offering a great user experience on your website.

  Major search engines like Google are favouring user experience more and more every year. This means knowing how to track and analyse website metrics like page load times, time on page, pageviews, media plays and event tracking.

  8. Use an ethical web analytics solution

  Last but certainly not least. Tracking your website visitors ethically is key to maintaining SEO ethics.

  You can do this by using an ethical web analytics solution like Matomo, Plausible or Fathom. All three are committed to respecting user privacy and offer ethical tracking of visitors.

  We’re a bit biassed towards Matomo, of course, but for good reasons.

  Matomo offers accurate, unsampled data along with advanced features like heatmaps, session recording, and A/B testing. These features enhance user experience and support ethical SEO practices by providing insights into user behaviour, helping optimise content. 

  Try Matomo for Free

  Get the web insights you need, without compromising data accuracy.

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  6 unethical SEO practices to avoid

  Now that we’ve covered the ethical SEO best practices let’s talk about what kind of unethical SEO practices you want to avoid.

  Remember, SEO isn’t as easy to manipulate as it once was 20 years ago.

  Algorithms are much more sophisticated now, and search engines are getting better at detecting fraudulent, scammy or unethical SEO practices every year.

  Avoid these eight unethical SEO practices to ensure you can rank high in the long term :

  

  1. Keyword stuffing

  Keyword stuffing is probably the most common unethical SEO practice. This is where someone deliberately stuffs keywords onto a page to manipulate the search engines to rank a web page higher.

  Where this is unethical isn’t always easy to detect, but in some cases, it is. It comes down to whether it’s relevant and natural or intentionally stuffing.

  2. Cloaking

  Cloaking is another unethical SEO practice where someone manipulates the information search engines see on their website.

  For example, someone may show search engines one web page on their website, but when someone clicks on it in Google, they can direct someone to a completely different page. They do this by detecting the incoming request from the user agent and presenting different content.

  3. Deceiving functionality

  Another way companies are unethically implementing SEO tactics is by deceiving people with misleading information. For example, a website may claim to provide a free resource or directory but may intentionally lead visitors to paid products.

  4. Fraudulent redirects

  Another way to deceive or mislead searchers is by creating fraudulent redirects. A redirect is a way to take someone to a different web page when they click on another one. Redirects can be useful if a page is broken or outdated. However, they can be used to deceptively take someone to a website they didn’t intend to view.

  5. Negative SEO

  Negative SEO is the intentional attempt to harm a competitor’s search engine rankings through unethical tactics.

  These tactics include duplicating their content or generating spammy links by creating low quality or irrelevant backlinks to their site.

  6. Hidden text

  Placing hidden text on a website typically has one purpose : keyword stuffing.

  Instead of making it visible to users reading the content, websites will place invisible text or text that’s hard to read on a website to try to rank the content higher and manipulate the search engines.

  3 reasons you need to implement ethical SEO

  So, why should you ensure you only implement ethical SEO in your organic traffic strategy ?

  It’s not just about what’s morally right or wrong. Implementing ethical SEO is the smartest long-term marketing strategy :

  1. Better long-term SEO

  Search engine optimisation is about implementing the “right” tactics to get your website to rank higher.

  The funny thing is many people are trying to get quick fixes by manipulating search engines to see results now.

  However, the ones who implement shady tactics and “hacks” to game the system almost always end up losing their rankings in the long term. 

  The best long-term SEO strategy is to do things ethically. Create content that helps people. Make higher quality content than your competitors. If you do those two things right, you’ll have better search traffic for years.

  2. Great brand reputation

  Not only is ethical SEO a great way to get long-term results, but it’s also a good way to maintain a solid brand reputation.

  Reputation management is a crucial aspect of SEO. All it takes is one bad incident, and your SEO could be negatively impacted.

  3. Lower chance of penalties

  If you play by the rules, you have a lower risk of being penalised by Google.

  The reality is that Google owns the search engine, not you. While we can benefit from the traffic generation of major search engines, you could lose all your rankings if you break their guidelines.

  Track SEO data ethically with Matomo

  Ethical SEO is all about :

  • Serving your audience
  • Getting better traffic in the long run

  If you fail to follow ethical SEO practices, you could be de-ranked or have your reputation on the line.

  However, if you implement ethical SEO, you could reap the rewards of a sustainable marketing strategy that helps you grow your traffic correctly and increase conversions in the long term.

  If you’re ready to start implementing ethical SEO, you need to ensure you depend on an ethical web analytics solution like Matomo.

  Unlike other web analytics solutions, Matomo prioritises user privacy, maintains transparent, ethical data collection practices, and does not sell user data to advertisers. Matomo provides 100% data ownership, ensuring that your data remains yours to own and control.

  As the leading privacy-friendly web analytics solution globally, trusted by over 1 million websites, Matomo ensures :

  • Accurate data without data sampling for confident insights and better results
  • Privacy-friendly and GDPR-compliant web analytics
  • Open-source access for transparency and creating a custom solution tailored to your needs

  Try Matomo free for 21-days. No credit card required.

  Try Matomo for Free

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• A Quick Start Guide to the Payment Services Directive (PSD2)

  22 novembre 2024, par Daniel Crough — Banking and Financial Services, Privacy

  In 2023, there were 266.2 billion real-time payments indicating that the demand for secure transactions has never been higher. As we move towards a more open banking system, there are a host of new payment solutions that offer convenience and efficiency, but they also present new risks.

  The Payment Services Directive 2 (PSD2) is one of many regulations established to address these concerns. PSD2 is a European Union (EU) business initiative to offer smooth payment experiences while helping customers feel safe from online threats. 

  In this post, learn what PSD2 includes, how it improves security for online payments, and how Matomo supports banks and financial institutions with PSD2 compliance.

  What is PSD2 ? 

  PSD2 is an EU directive that aims to improve the security of electronic payments across the EU. It enforces strong customer authentication and allows third-party access to consumer accounts with explicit consent. 

  Its main objectives are :

  • Strengthening security and data privacy measures around digital payments.
  • Encouraging innovation by allowing third-party providers access to banking data.
  • Improving transparency with clear communication regarding fees, terms and conditions associated with payment services.
  • Establishing a framework for sharing customer data securely through APIs for PSD2 open banking.

  Rationale behind PSD2 

  PSD2’s primary purpose is to engineer a more integrated and efficient European payment market without compromising the security of online transactions. 

  The original directive aimed to standardise payment services across EU member states, but as technology evolved, an updated version was needed.

  PSD2 is mandatory for various entities within the European Economic Area (EEA), like :

  • Banks and credit institutions
  • Electronic money institutions or digital banks like Revolut
  • Card issuing and acquiring institutions
  • Fintech companies
  • Multi-national organisations operating in the EU

  PSD2 implementation timeline

  With several important milestones, PSD2 has reshaped how payment services work in Europe. Here’s a closer look at the pivotal events that paved the way for its launch.

  • 2002 : The banking industry creates the European Payments Council (EC), which drives the Single Euro Payments Area (SEPA) initiative to include non-cash payment instruments across European regions. 
  • 2007 : PSD1 goes into effect.
  • 2013 : EC proposes PSD2 to include protocols for upcoming payment services.
  • 2015 : The Council of European Union passes PSD2 and gives member states two years to incorporate it.
  • 2018 : PSD2 goes into effect. 
  • 2019 : The final deadline for all companies within the EU to comply with PSD2’s regulations and rules for strong customer authentication. 

  PSD2 : Key components 

  PSD2 introduces several key components. Let’s take a look at each one.

  Strong Customer Authentication (SCA)

  The Regulatory Technical Standards (RTS) under PSD2 outline specific requirements for SCA. 

  SCA requires multi-factor authentication for online transactions. When customers make a payment online, they need to verify their identity using at least two of the three following elements :

  • Knowledge : Something they know (like a password, a code or a secret answer)
  • Possession : Something they have (like their phone or card)
  • Inherence : Something they are (like biometrics — fingerprints or facial features)

  

  Before SCA, banks verified an individual’s identity only using a password. This dual verification allows only authorised users to complete transactions. SCA implementation reduces fraud and increases the security of electronic payments.

  SCA implementation varies for different payment methods. Debit and credit cards use the 3D Secure (3DS) protocol. E-wallets and other local payment measures often have their own SCA-compliant steps. 

  3DS is an extra step to authenticate a customer’s identity. Most European debit and credit card companies implement it. Also, in case of fraudulent chargebacks, the issuing bank becomes liable due to 3DS, not the business. 

  However, in SCA, certain transactions are exempt : 

  • Low-risk transactions : A transaction by an issuer or an acquirer whose fraud level is below a specific threshold. If the acquirer feels that a transaction is low risk, they can request to skip SCA. 
  • Low-value transactions : Transactions under €30.
  • Trusted beneficiaries : Trusted merchants customers choose to safelist.
  • Recurring payments : Recurring transactions for a fixed amount are exempt from SCA after the first transaction.

  Third-party payment service providers (TPPs) framework

  TPPs are entities authorised to access customer banking data and initiate payments. There are three types of TPPs :

  Account Information Service Providers (AISPs)

  AISPs are services that can view customers’ account details, but only with their permission. For example, a budgeting app might use AISP services to gather transaction data from a user’s bank account, helping them monitor expenses and oversee finances. 

  Payment Initiation Service Providers (PISPs)

  PISPs enable clients to initiate payments directly from their bank accounts, bypassing the need for conventional payment options such as debit or credit cards. After the customer makes a payment, PISPs immediately contact the merchant to ensure the user can access the online services or products they bought. 

  Card-Based Payment Instruments (CBPII)

  CBPIIs refer to services that issue payment cards linked to customer accounts. 

  Requirements for TPPs

  To operate effectively under PSD2, TPPs must meet several requirements :

  Consumer consent : Customers must explicitly authorise TPPs to retrieve their financial data. This way, users can control who can view their information and for what purpose.

  Security compliance : TPPs must follow SCA and secure communication guidelines to protect users from fraud and unauthorised access.

  API availability : Banks must make their Application Programming Interfaces (APIs) accessible and allow TPPs to connect securely with the bank’s systems. This availability helps in easy integration and lets TPPs access essential data. 

  Consumer protection methods

  PSD2 implements various consumer protection measures to increase trust and transparency between consumers and financial institutions. Here’s a closer look at some of these key methods :

  • Prohibition of unjustified fees : PSD2 requires banks to clearly communicate any additional charges or fees for international transfers or account maintenance. This ensures consumers are fully aware of the actual costs and charges.
  • Timely complaint resolution : PSD2 mandates that payment service providers (PSPs) have a straightforward complaint procedure. If a customer faces any problems, the provider must respond within 15 business days. This requirement encourages consumers to engage more confidently with financial services.
  • Refund in case of unauthorised payment : Customers are entitled to a full refund for payments made without their consent.
  • Surcharge ban : Additional charges on credit and debit card payments aren’t allowed. Businesses can’t impose extra fees on these payment methods, which increases customers’ purchasing power.

  Benefits of PSD2 

  Businesses — particularly those in banking, fintech, finserv, etc. — stand to benefit from PSD2 in several ways.

  Access to customer data

  With customer consent, banks can analyse spending patterns to develop tailored financial products that match customer needs, from personalised savings accounts to more relevant loan offerings.

  Innovation and cost benefits 

  PSD2 opened payment processing up to more market competition. New payment companies bring fresh approaches to banking services, making daily transactions more efficient while driving down processing fees across the sector.

  Also, banks now work alongside payment technology providers, combining their strengths to create better services. This collaboration brings faster payment options to businesses, helping them stay competitive while reducing operational costs.

  Improved customer trust and experience

  Due to PSD2 guidelines, modern systems handle transactions quickly without compromising the safety of payment data, creating a balanced approach to digital banking.

  

  Banking customers now have more control over their financial information. Clear processes allow consumers to view and adjust their financial preferences as needed.

  Strong security standards form the foundation of these new payment systems. Payment provider platforms must adhere to strict regulations and implement additional protection measures.

  Challenges in PSD2 compliance 

  What challenges can banks and financial institutions face regarding PSD2 compliance ? Let’s examine them. 

  Resource requirements

  For many businesses, the new requirements come with a high price tag. PSD2 requires banks and fintechs to build and update their systems so that other providers can access customer data safely. For example, they must develop APIs to allow TPPs to acquire customer data. 

  Many banks still use older systems that can’t meet PSD2’s added requirements. In addition to the cost of upgrades, complying with PSD2 requires banks to devote resources to training staff and monitoring compliance.

  The significant costs required to update legacy systems and IT infrastructure while keeping services running remain challenging.

  Risks and penalties

  Organisations that fail to comply with PSD2 regulations can face significant penalties.

  Additionally, the overlapping requirements of PSD2 and other regulations, such as the General Data Protection Regulation (GDPR), can create confusion. 

  Banks need clear agreements with TPPs about who’s responsible when things go wrong. This includes handling data breaches, preventing data misuse and protecting customer information. 

  Increased competition 

  Introducing new players in the financial ecosystem, such as AISPs and PISPs, creates competition. Banks must adapt their services to stay competitive while managing compliance costs.

  PSD2 aims to protect customers but the stronger authentication requirements can make banking less convenient. Banks must balance security with user experience. Focused time, effort and continuous monitoring are needed for businesses to stay compliant and competitive.

  How Matomo can help 

  Matomo gives banks and financial institutions complete control over their data through privacy-focused web analytics, keeping collected information internal rather than being used for marketing or other purposes. 

  Its advanced security setup includes access controls, audit logs, SSL encryption, single sign-on and two-factor authentication. This creates a secure environment where sensitive data remains accessible only to authorised staff.

  While prioritizing privacy, Matomo provides tools to understand user flow and customer segments, such as session recordings, heatmaps and A/B testing.

  Financial institutions particularly benefit from several key features : 

  • Tools for obtaining explicit consent before processing personal data like this Do Not Track preference
  • Insights into how financial institutions integrate TPPs (including API usage, user engagement and potential authentication drop-off points)
  • Tracking of failed login attempts or unusual access patterns
  • IP anonymization to analyse traffic patterns and detect potential fraud

  

  PSD3 : The next step 

  In recent years, we have seen the rise of innovative payment companies and increasingly clever fraud schemes. This has prompted regulators to propose updates to payment rules.

  PSD3’s scope is to adapt to the evolving digital transformation and to better handle these fraud risks. The proposed measures : 

  • Encourage PSPs to share fraud-related information.
  • Make customers aware of the different types of fraud.
  • Strengthen customer authentication standards.
  • Provide non-bank PSPs restricted access to EU payment systems. 
  • Enact payment rules in a directly applicable regulation and harmonise and enforce the directive.

  Web analytics that respect user privacy 

  Achieving compliance with PSD2 may be a long road for some businesses. With Matomo, organisations can enjoy peace of mind knowing their data practices align with legal requirements.

  Ready to stop worrying over compliance with regulations like PSD2 and take control of your data ? Start your 21-day free trial with Matomo.