What is 3D Secure?
In short, 3D Secure was created by Visa and MasterCard to add an additional layer of security for Card Not Present (CNP) merchants. Moreover, 3D Secure ties the financial authorization process with online authentication based on a three-domain model (3D). The three domains consist of:
- Acquirer Domain (the bank and the merchant to which the money is being paid)
- Issuer Domain (the bank which issued the card being used)
- Interoperability Domain (Visa & MasterCard)
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How 3D Secure Works
The 3D Secure feature works through the 3D Payment Gateway enables the shopper to enter a password to confirm their identity with the card issuers. Additionally, If the card issuer accepts the password then they complete their order and this comes to you as a legitimate and authenticated transaction.
This means that:
- Merchants have added protection from fraudulent payments
- It allows merchants to sell their products online with more safeguards
- It enhances the customers confidence in the merchant resulting in increased spending
- Reduces costs from fraudulent chargebacks by cutting down on the amount of fraud
What are the benefits of using 3D Secure?
The primary benefit of 3-D Secure is reducing disputes. In fact, this technology also reduces expenses and losses. To that end, approximate 80% of all e-commerce chargebacks and fraud are preventable. Moreover, you can eliminate a proportion of customer complaints with the use of Authenticated Payment. As a result, 3D Secure has a positive impact on Member profitability.
3D Secure Payments
A less tangible, but nevertheless real benefit is the assurance members provide to their cardholders who are considering e-commerce transactions. Studies indicate that as many as a third of cardholders are afraid to shop online. Security concerns and a fraud prevalent online landscape make customers reluctant. To contend with this fear, an Authenticated Payment may convince prospective ecommerce shoppers that it is safe to use their card online.
Additional Featuers of 3D Secure Payments
Benefits for Cardholder
- Increased consumer confidence when purchasing
- The cardholder device doesn’t need special software
- Easy to use
- Control over card use for online purchases
Benefits for Merchants
- Minimal impact on merchant’s interaction with the consumer
- Increased sales by enhancing consumer confidence
- Reduced risk of fraudulent transactions
- Decrease in disputed transactions