3D Secure: What It Is, How It Works, and Why Your Business Needs It

With millions of malware and phishing attacks reported in the world on a daily basis, many businesses are looking into ways to improve their digital payment security. One such technology that has made waves is called 3D Secure, a protocol designed to act as an additional security layer on online credit and debit transactions.

Not sure whether you should invest in the 3D Secure technology? To make your decision easier, let’s go over how 3D Secure works and why implementing it will help your company.

What Is 3D Secure?

3D Secure is a protocol that was originally developed by Visa and Mastercard as part of their fraud prevention efforts. You can recognize a 3D Secure transaction through brand names like Visa Secure (or Verified by Visa) and Mastercard Identity Check (or Mastercard SecureCode).

For merchants, the main purpose of implementing 3D Secure is to add another layer of security to the online transaction process. This security layer involves contacting the issuing bank to verify the cardholder’s identity. In case of fraud, 3D Secure shifts the blame (along with the threat of chargebacks) to the bank rather than the merchant.

How Does 3D Secure Work?

In essence, 3D Secure is simply an additional step for customers to go through when buying something online. After inputting their payment details, they’ll often be directed to an authentication page on their bank’s website. To pass the verification check, they’ll need to enter a code sent to their phone or type out a password associated with their card.

If the cardholder isn’t enrolled in Visa Secure or Mastercard Identity Check, they’ll need to register for the transaction to proceed. To make the transaction process simpler, many merchants opt to only use 3D Secure technology for high-risk transactions.

Benefits of Implementing 3D Secure

Using a 3D Secure system can benefit businesses across all industries. As mentioned, the main purpose of this technology is to reduce fraud by confirming customer identity. Thanks to these security measures, 3D Secure also creates more consumer trust. As a result, your customers will feel safer making transactions on your site and will be more likely to return.

Another reason why your business should implement 3D Secure is the customer experience it offers. In many cases, the authorization process takes place in the background and requires no input from the customer. If input is needed, the whole experience is frictionless for the user.

Finally, not implementing 3D Secure makes your business more susceptible to financial losses and reputation damage. In the long run, this sort of financial risk may lead to payment processors demanding higher processing rates.

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