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3D Secure: Minimize fraud and maximize conversion
Reduce fraud and improve the customer experience with 3D Secure
What is 3D Secure?
At its core, 3D Secure is a method to secure online payments and serves as a means to achieve Strong Customer Authentication (SCA). ‘3D’ stands for the 3 domains which participate in the exchange of information to authenticate the cardholder – the Acquirer, the Scheme and the Issuer.
3D Secure can be used by merchants globally, not just in countries regulated under PSD2, to help protect against fraud. As the ecommerce industry expands globally, consumer purchases cross regional borders, making fraudulent transactions more common. 3D Secure is available with all major card networks.
On September 14th 2019, new requirements for authenticating online payments were rolled out in Europe as part of PSD2, or the second Payment Services Directive. As part of this, there is a new set of technical standards required for payment authentication known as Strong Customer Authentication (SCA), designed to help reduce fraud and increase security for end users. To comply with the new standards, EMV® Co devised an updated version of the 3D Secure protocol – 3D Secure 2 (also referred to as EMV® 3D Secure).
The PSD2 mandate is now fully in place across EEA (as of 1st January 2021) and UK (as of 14th March 2022) and is actively being enforced. Merchants would need to be compliant and use 3D Secure 2 or request an exemption in their payment flow, otherwise they risk potential fines.
In North America and other regions, 3D Secure is not mandated or required. However, there are benefits to using 3D Secure as part of the payment cycle. 3D Secure 1 was retired globally on 15th October 2022 with only a small number of countries having an extension to 15th October 2023. Any existing merchant payment integrations using this version need to migrate to using 3D Secure 2.
Should you have any other enquiries, check our FAQs.
Frictionless Authentication
Due to the over 10x more data exchanged compared to 3D Secure 1, 3D Secure 2 allows issuing banks to perform Risk-based Authentication (RBA) on transactions. This enables the issuing bank to make a real-time assessment of the payment without needing to ask the customer for any additional authentication (2FA) or information. What this means is the customer will not be redirected to their bank for authentication and the transaction will still include the all-important liability shift. The more data sent during authentication, the higher the chances of approved transactions.
Chargeback Liability Protection
A key benefit of using 3D Secure 2 as part of the checkout flow is the liability shift in the case of fraud-related chargebacks. It shifts liability from the merchant to the cardholder’s issuing bank. This is especially important for high-risk verticals and high-value transactions.
Improved Authentication Experience
3D Secure 2 allows cardholders to prove to their bank it’s them making the payment using biometrics, such as a fingerprint or facial recognition.
3D Secure 2 brings support for exemptions from SCA transactions in different business models and enables working with more complex payment use cases.
What You Need To Do
As the world of finance has developed, and the need for more robust security measures has increased, static password systems have become insecure and outdated.
To help you with the process of implementing 3D Secure in your checkout flow we’ve updated our Development Centre with an Introduction to 3D Secure 2.
Make sure you plan out your approach. If you are new or already using Paysafe, check your regional requirements below to understand how 3D Secure applies to you and how to extract the most out of its benefits.
Get in touch
North America
US & Canada (EN): technicalsupport@paysafe.com
Canada (FR): soutientechnique@paysafe.com