3D Secure

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3D Secure: Safeguarding Your Transactions

Credit card fraud over the Internet is all too common in today’s digital marketplace. Credit card companies have implemented authentication technology to safeguard online transactions.

What is 3D Secure?

3D Secure is a term used to describe a particular authentication service provided by certain credit card companies for online transactions. The ‘3D’ in the name represents the three domains involved in the transaction.

They are:

• Acquirer Domain: Represented by the merchant’s bank accepting the payments
• Issuer Domain: Represented by the cardholders issuing organization
• Interoperability Domain: Represented by the payment systems connecting the first two domains

3DS is also known by alternative names depending on the card type:

• Visa: Visa Secure
• American Express: American Express SafeKey
• JCB: J/Secure
• MasterCard: Identity Check (formerly known as SecureCode)
• Diners Club & Discover: ProtectBuy

How it Works

When a card is entered online, the processing system checks to see if that card is enrolled in a 3DS protocol. If it is, the transaction is redirected to a 3D Secure page that is run by the card provider.

At this point, the customer is forced to enter a unique password or code that has been emailed to them or sent to them via their cell phone. If the correct code is entered, the customer is redirected back to the merchant website to complete the transaction.

Benefits of 3D Secure

By taking the time to authenticate cards, you lower the risk of chargebacks originating from fraudulently obtained credit cards.

As an added benefit, the liability shifts from you to the card-issuing bank. If a cardholder using 3D Secure somehow does have a fraudulent charge, the institution issuing the card is liable for returning the funds to the customer.

Drawbacks of 3D Secure

Sometimes, a customer may not be happy when redirected from your site. They may see the redirect as a security threat or may be aggravated and abandon their shopping cart entirely.

This inconvenience has been acknowledged by credit card companies, as it is in their best interest to have the transactions be completed as well.

3DS 2.0

Credit card companies have recently improved upon the original technology and 3DS 2.0 has reduced the need to type in a password or code. This is great news for the user as well as the merchant.

This technology now integrates more seamlessly with checkouts so that the user is not fully redirected and the transaction can be authenticated more easily.

It utilizes many additional data points of the user to help authenticate the card. These may include past purchases, geolocation, and the device ID.

A recent study by Visa showed that when using 3DS 2.0, the number of shopping carts abandoned was reduced by 70%.

Protect Your Business

Utilizing a payment processor that supports and integrates with the use of 3D Secure will protect you and your customers from online credit card fraud.

As time goes on, more transactions will be completed online and technology will evolve to keep up with the marketplace. Choose a payment processor that offers the latest technology to keep you ahead of your competition.

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