What is a 3D Secure Authentication?

Many card transactions that would have been done in person can now be done online because of the growing popularity of e-commerce platforms Card-not-present (CNP) payments have risen. As a result, they provide greater convenience for consumers starting the transaction. They require less from retailers, who no longer need to establish a physical location or engage dedicated workers to collect payments. However, the disadvantage of digital modernity is that it makes credit card fraud more common and challenging to detect.

What is 3D Secure Authentication?

3DS is a security protocol that allows users to be authenticated. This adds an extra degree of security to payment card transactions in card-not-present instances. It was created to enable cardholders to verify their identity to avoid payment fraud, unlawful transactions, and chargebacks.

This security protocol is used throughout Europe due to PSD2's SCA mandate, but it is also utilized in nations outside of the EU, such as South Africa and India. Many card brands have implemented versions of the protocol, including EMVCo members Visa, Mastercard, Discover, American Express, JCB, and UnionPay, who drove the development of 3-D Security 2.0. (3DS2).

How Does 3D Secure Work?

Customers can now complete a secure authentication step before purchasing an online service or product, thanks to the extra layer of protection.

  • The previous 3D Secure 1.0 technology required customers to go to their bank's 3D Secure website page and provide an additional security code or password (sent to their phone number via text) to proceed with the payment process.

  • The issuing bank would authorize the payment after the correct code or password was entered, and the shopper would return to the merchant's website.

  • Using the 3D Secure system provides an additional layer of protection against fraudulent payments for a business.

3D Secure 2.0

3D Secure has been there for a while, and now there's a new standard, 3DS 2.0 (or EMV 3DS), that strengthens security and authorizations for digital transactions.

  • The European Union's Payment Services Directive 2 (PSD2) has brought various modifications to online transaction security, including the requirement for European Union shoppers to use the Strong Consumer Authentication component (SCA).

  • The new 2.0 version of the 3D Secure technology is part of the SCA standards. It is an evolutionary step forward from its predecessor. It allows the card issuer (bank) to do a risk-based analysis using a more significant number of data points from the transaction.

  • It allows for a more accurate, real-time authentication of clients without requiring a static password or slowing down business. For example, the card issuer will not send any additional authentication requests to the cardholder for low-risk and low value transactions (i.e., less than 30 EUR). All other customerinitiated transactions, however, will require the cardholder to complete 2-Factor Authentication (2FA), which can be done via text (SMS), app push notifications, or biometric means (fingerprint, etc.).

  • As a result, a payment provider must manage the new 3D Secure 2 authentication flows and the exemptions for recurring payments, low-value transactions, low-risk transactions, and trusted beneficiaries. 3DS2 is mobile-friendly, with a responsive design adjusted to fit any device. However, it will be up to the cardissuing banks to implement all of the user experience (UX) changes to the login window, so the front-end offered to cardholders may differ depending on their bank.

When 3D Secure Authentication Fails, What Should You Do?

If you get a "3D Authentication failed" message, it means you didn't correctly enter the essential information. Please double-check that Caps Lock is turned off and go through the process again to ensure no typos.

If the problem persists, please contact your credit card provider – generally a bank – for more assistance.

Which Countries Use 3D Secure Authentication?

In the EU, Australia, India, Brazil, Mexico, Singapore, and other nations, 3D Secure is widely utilized. It lowers the danger of fraud and makes online purchasing and e-commerce much safer. For example, 3D Secure Authentication is not commonly used in the United States, where bank card fraud is four times higher than in the EU.

What are the Advantages of using 3D Secure?

3D Secure provides an additional degree of security for you and your customers, preventing card information from being stolen and used online. It also guards against chargebacks for transactions that were not authorized. Once the purchase has passed the 3D secure authentication process, the seller is no longer responsible for it. The responsibility is transferred to the card payment provider, who will handle any client refunds. It means you'll save time and money by having fewer customer settlement issues.