If a global sneaker company is using 3D secure during its online payment processing, certainly it’s a viable option for small business merchants who wish to securely process transactions via their website.
For years, we’ve seen e-commerce merchants shun 3D secure payment processing, believing it was a hindrance, a gateway to shopping cart abandonment. In its early stages, it was a significant hurdle. In the midst of an online checkout, consumers would be faced with a popup window requesting credentials. In the confusion of it, too often customers abandoned the purchase.
3D secure 2.0, however, has addressed and remedied the popup disruption that led to a rash of shopping cart abandonment, thus causing merchants to flee for non-3D secure merchant accounts.
A very good 3D secure experience
With my youngest son’s birthday approaching, we got him a pair of high end sneakers from a world-renowned brand on its website. Earlier in the day, my wife and I noticed him on the brand’s website checking them out. When he left the room, we pounced on them unbeknownst to him. They’ll be arriving at the end of the week.
The checkout experience was routine, easy, with the sneaker brand requesting all of the appropriate information about my payment card details – shipping and billing address, CVV code, even my e-mail and phone details. Seconds after clicking the checkout button, the screen switched to the familiar Capital One screen (my credit card issuer) with a verified by Visa logo. Because I am a payments geek, I was excited to see 3D secure 2.0 online payment processing in action. After 2-3 seconds, my screen returned to the sneaker brand’s checkout page, notifying me the transaction was a success.
Was my checkout experience longer? Maybe by a few seconds. As a consumer, I’ll wait the extra moments a transaction takes in exchange for the peace of mind 3D secure processing brings.
What’s actually going on in a 3D secure transaction?
The 3D secure online payment process entails a rapid exchange of information between three parties:
- In an online purchase, the cardholder enters their information on the merchant website.
- The merchant redirects the cardholder to a 3D secure website of the card-issuing bank (in my case, Verified by Visa) for authentication.
- The cardholder is then redirected back to the merchant website and notified of the authorized or declined transaction.
In the original model of 3D secure, the cardholder was prompted to enter a password or a four-digit PIN when redirected to the 3D secure website of the card issuing bank. 3D secure 2.0 eliminated that step, instead verifying cardholder data entered during the transaction, usually in the background, via the merchant’s checkout page.
3D secure adoption remains slow, but there is proof of success
E-commerce merchants are very protective of their checkout experience (as they should be). Online consumers are impatient, thus e-commerce checkout needs to be as seamless and friction-free as possible. Any hurdle or extra step in checkout, even in the name of security, is met with caution by merchants.
When 3D secure 2.0 was released, mass rail transit giant Amtrak used Verified by Visa for a year as part of its online ticket buying experience with very encouraging results: an 80 percent decrease in chargebacks and 2.4 percent increase in authorized transactions.
The one (huge) reason to use 3D secure technology
Secure online payment processing is the reason e-commerce merchants should adopt 3D secure technology. Authenticating transactions has a wonderful ripple effect which includes weeding out friendly fraud and chargebacks. In the case of friendly fraud, a dubious cardholder virtually cannot defend not making the purchase, thus ruling the chargeback illegitimate.
Considering the current climate of e-commerce, defending one’s business against fraud and chargeback is the top priority. In recent years, chargeback threshold, which used to be 2 percent of sales or 200 chargebacks incurred per month, has been halved to 1 percent, 100 chargebacks per month. In fact, once an e-commerce merchant crosses the 0.75 percent or 75 per month divide, they draw the attention of the card brands and possible intervention.
Merchants have had no choice but to adjust their models and bolster their customer support.
3D secure online payment processing with Instabill
In the many merchant account inquiries we receive, the majority of merchants still prefer non-3D secure online payment processing. With 3D secure merchant accounts, we can guarantee that your chargeback rate will drop, and that your transactions will be far more secure. In addition to Verified by Visa, we also offer solutions with American Express SafeKey and MasterCard Secure Code as well as JCB’s J/Secure.
Speak with a live merchant account expert today about 3D secure merchant account solutions at 1-800-530-2444.