3D Secure and Its Many Advantages

3D secure and non-3D secure merchant accounts by Instabill

3D Secure and Its Many Advantages

Online shopping has become increasingly perilous over the last several years, and is projected to get worse. In fact, 47 percent of the world’s credit card fraud happens in the U.S. It is rare that American consumers can go a week or two without hearing of a customer data breach suffered by an online retailer.

Visa and MasterCard had an idea e-commerce credit card fraud was coming and thus created 3D secure card validation.

What is 3D Secure Card Validation?

3D Secure was designed and developed by MasterCard and Visa to secure online shopping transactions and authenticate the cardholder’s identity. As a new technical standard, it was designed to reduce risks of unauthorized card usage. With this new technology in place, online shopping has become more safe and secure for the merchants and the customers.

Visa has branded their system as “Verified by Visa” and MasterCard offers its system under the brand of “MasterCard SecureCode.” Although 3D Secure offers a wide and superior range of protection system merchants must not consider it as the universal remedy for all kinds of online payment fraud.

Coming soon: 3D Secure 2.0

The second iteration of 3D secure, 3DS 2.0, is said to be launching later in 2017. Though the intent of 3DS was all about secure online credit card transactions, the initial release of such was seen more as a transaction disruption than a tool to keep transaction data safe.

3DS 2.0 is expected to make the transaction both more secure and friction free. Among the expected upgrades include user authentication by one-time passwords, biometrics and backend authentication; authentication over multiple platforms; and no more pop-up windows during the checkout process (arguably the biggest complaint among merchants).

With such upgrades, consumers will experience a smoother, more secure checkout process while merchants can expect less cases of checkout abandonment.

Advantages of Using 3D Secure

There are many advantages of using 3D Secure. Some of them are given below:

  • Reduced Risk Fraud — with this new technology misuse of cards and loss of payments is significantly reduced.
  • More Protection — Authorization requires confirmation of identity, code etc. from the card issuer.
  • Safety against Fraud Loss — it provides merchants security against fraud loss.
  • Greater Customer Content — Using a 3DS  protection such as Verified by Visa or MasterCard SecureCode provides greater customer satisfaction. Clients now find it easy and secure to shop online.
  • Increase in Sales — with the new customer confidence there is an increase in sales.
  • Better International Transaction — merchants find it safe to accept international card transactions.
  • Secure Server — 3D Secure offers secure transactions through SSL encryption.
  • Merchant Satisfaction — with reduction in fraud cases the merchants get an opportunity to increase sales and decrease disputed transactions.

3D Secure allows online validation of payments and credit card transactions. As an authentication technology, 3DS uses SSL encryption to transmit information. At Instabill, we believe in providing our clients with the best and that is why we offer 3DS system for safe online transactions.

Why Merchants Need to Take Note of 3DS

3D secure is proven to work. We know some merchants are discouraged by risk of disrupted sales and shopping cart abandonment. For those merchants who remain in doubt, there is a study to read about in which Amtrak and Cardinal Commerce experienced groundbreaking results while using 3DS.

Echoing our initial point: As the U.S. has (finally) become the last major nation to migrate to the use of EMV chip-enabled credit cards, EMV cards aren’t as secure when used online. Thus, those fraudsters and hackers that are unable to steal and counterfeit credit card data, are now moving to the e-commerce channel, where it is easier to penetrate and steal data.

That said, we feel investing in 3Ds technology is well worth investigating.