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As of today, 86% of people have fallen victim to identity theft at least once in their lifetime. Statistics don’t seem to get better any time soon. No wonder, companies are looking for preventive measures to protect their business and customers. 3D Secure has become fairly common these days. The technology provides an additional layer of security to prevent fraudulent transactions. In this article, you will learn how to use this security protocol in your business.
3D Secure is a security protocol meant to protect businesses and consumers from online fraud by adding an extra layer of verification. Established by Arcot Systems (now CA Technologies), 3D Secure authentication covers three domains to verify each transaction: the card issuer, the acquiring bank, and the payment gateway. Over the past decade, major card companies, including Visa, MasterCard, and American Express, have adopted the technology. The added level of security encourages consumers to make online purchases with greater confidence.
3D Secure helps buyers complete an online purchase safely. To get started, the cardholder must enter a unique password, an SMS code, or a temporary PIN. The whole process looks like this:
3D Secure has been implemented by major card providers. Let’s see the key ones:
Mastercard Identity Check: Mastercard’s 3D Secure uses Identity Check to verify cardholders through biometric authentication (e.g., fingerprints or facial recognition) or a one-time password (OTP). This feature ensures a seamless and secure shopping experience for online buyers.
Visa Secure: Visa’s 3D Secure, known as Visa Secure, uses risk-based authentication to evaluate each transaction. This feature reduces the friction for buyers and prevents card-not-present fraud.
American Express SafeKey: American Express’ 3D Secure is designed to enhance transaction security. This feature uses real-time fraud monitoring and OTPs to verify cardholder identity, which minimizes the possible security risks.
Now that you are familiar with 3D secure transaction meaning, make sure to check its real value for your business. Let’s see the key benefits below.
Merchants used to be responsible for chargebacks, which is why any fraud came at their expense. With the integration of 3D Secure, the responsibility is shifted to the issuing bank. Consumers just need to check the issuer’s documentation and understand the rules and regulations regarding 3D Secure.
A fraudster may use a stolen bank card to make an online purchase, and many companies have lost millions due to such scams. 3D Secure requires additional information (a unique code or an answer to a secret question) that only the real cardholder would know.
3D Secure adds a significant layer of protection against fraud, requiring buyers to complete authorization through one-time passwords or biometrics. This reduces unauthorized transactions, builds customer trust, and minimizes financial losses for businesses, making online transactions safer and more reliable for all parties.
Card-Not-Present (CNP) merchants have to build customer confidence through safety and trust. It’s important to reassure potential buyers that their sensitive data is in safe hands. 3D Secure promises to eliminate potential fraud and create a safer shopping experience on the e-commerce platform.
While the 3d Secure system has many benefits for businesses and consumers, there are certainly drawbacks. Let’s see some of them below.
Entering a one-time password or answering a security question can slow down the payment process. The average 3D Secure confirmation may take more than 5 seconds, while the standard transaction lasts at least 37 seconds. This extra time may cause frustration, leading to cart abandonment and impacting overall business sales.
Sometimes buyers make a transaction, which ends up being rejected. False rejections may be caused by the issuing bank’s strict requirements or the buyer’s suspicious activity. 3D Secure can challenge customers with blocked payments, potentially harming their loyalty.
Integrating 3D Secure technology involves setup costs, transaction fees, and potential upgrades, which can be costly for businesses. Maintaining these security measures requires ongoing expenses, which may impact the business’s budget and revenue in the long run. For example, the Visa fee is €0.02 for most credit card verification requests.
Buyers don’t need to activate 3d Secure authentication when making online purchases. Well-known bank card issuers like Visa and MasterCard have the security protocol integrated into their payment system. Businesses may also activate 3D Secure on their checkout pages. Buyers just need to follow the instructions when shopping online. If they enter incorrect card details, they will receive a warning. They will have to enter their card details once again to ensure the 3D Secure authentication goes through.
3D Secure helps businesses enhance security in online transactions by adding an extra layer of validation. During checkout, customers are redirected to a secure page where they’re asked to authenticate their identity, usually through a one-time password (OTP) sent to their phone or email. This process confirms the cardholder’s identity and automatically prevents unauthorized transactions. Merchants can integrate 3D Secure with their payment system through coordination with their bank or payment service provider. 3D Secure helps reduce fraud and increase trust in the safety of online payments.
With 3D Security explained, businesses can decide whether this technology serves their purposes. If not, they may consider alternative payment methods. For example, open banking is more secure than card payments due to integrated Strong Customer Authentication (SCA). Digital wallets, such as Apple Pay, Google Pay, and PayPal, replace card details with a unique digital token for each transaction to minimize the risk of data theft. Each method reduces the risk of fraud, making online shopping safer for consumers.
