How PSD2 affects your subscription

Sebastian Wedmalm

Modified on: Wed, 10 Nov, 2021 at 11:59 AM

For credit card customers, Detectify offers flexible subscriptions where you can scale the number of Application Scan profiles you need at any time. This means that if you add an Application Scan profile, your card will be charged for this profile for the remainder of your current billing period. Conversely, if you remove a profile you have already paid for, you will not be charged for this profile when your subscription renews for the upcoming billing period.

Let’s look at an example of how this works:

You subscribe to two Application Scan profiles with monthly payments. Every month, you are billed 176 EUR (2 * 88 EUR) for these profiles. Since you started your subscription on the 1st of January, you are billed on the 1st of every month.
On the 15th of June, you add a third Application Scan profile to your account. Accordingly, your card is charged with 44 EUR (0,5 * 88 EUR) since only half of the billing period remains. When the subscription renews for three profiles on the 1st of July, you are billed for 264 EUR (3 * 88 EUR).
Later in July, you remove one Application Scan profile. When the subscription renews on the 1st of August, you will once again be billed for 176 EUR (2 * 88 EUR), as the subscription automatically scales down to match the number of profiles at the time of renewal.

Beginning on the 13th of September 2019, most card payments will require Strong Customer Authentication (SCA) according to the updated Payment Services Directive (PSD2). In practice, this means that the financial institution which issued your credit card will ask you to authenticate the payments you make, for example by asking you for a two-factor authentication code. In general, subscriptions only require authentication on the original transaction, while the following recurring debits will be allowed without customer intervention. However, this only applies for static amounts, meaning that you may now be required to re-authenticate your subscription payments if you scale your subscription up or down.

Now, let’s make the example PSD2 compliant:

You subscribe to two Application Scan profiles with monthly payments. As you add your card and make your first payment, you will be asked by your bank to verify your payment with a two-factor authentication code. Every month, you are billed 176 EUR (2 * 88 EUR) for these profiles. Since you started your subscription on the 1st of January, you are billed on the 1st of every month. These recurring payments will typically not require re-authentication.
On the 15th of June, you add a third Application Scan profile to your account. Accordingly, your card is charged with 44 EUR (0,5 * 88 EUR) since only half of the billing period remains. Since this is a different amount than you’ve previously paid, your bank will require you to re-authenticate this payment. When the subscription renews for three profiles on the 1st of July, you are billed for 264 EUR (3 * 88 EUR), and as this amount differs from your previous recurring payments, your bank will require you to re-authenticate this transaction as well.
Later in July, you remove one Application Scan profile. When the subscription renews on the 1st of August, you will once again be billed for 176 EUR (2 * 88 EUR), as the subscription automatically scales down to match the number of profiles at the time of renewal. Since the transaction amount has changed again, your bank will require you to verify the new transaction amount.

When your subscription changes, you will receive an email from our payment provider Chargebee prompting you for re-authentication.

Let’s look at an example of how this works:

Now, let’s make the example PSD2 compliant:

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