3D Secure 2.0 is an authentication protocol that aims to reduce fraud and enhance security in online card payments. 3DS2 was introduced as an enhanced version of the old protocol 3DS and introduced a more frictionless payment flow across different devices.
The customers can authenticate their identity without disturbing their user experience within the merchant’s website, and the checkout process is smooth and seamless. To enable 3DS2 for their account, merchants should contact their payments service provider.
Visa created the Three-Domain Secure (3-DS) protocol in 1999, to help merchants and issuing banks authenticate cardholders’ identity when shopping online.
The three domains are the acquirer domain (the merchant and the bank to which the money is paid), the issuer domain (the bank that issued the cardholder’s card), and the interoperability domain (the infrastructure used by the card scheme to enforce 3DS protocol, i.e the Internet, the Merchant Plug-in, and Access Control Server - ACS).
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How does 3D Secure 2.0 work?
3D Secure 2.0 analyses over 100 key data points, including the merchant’s contextual data, acting as an advanced layer of fraud protection. The cardholder enters their card details at checkout. At this point, the merchant’s 3D Secure service provider sends an authentication request with rich data to the issuer. This data includes a varying amount of cardholder and device information upon regional or market law restrictions, such as device ID, MAC address, geo-location, previous transactions, etc.
Then, the issuer’s 3D Secure service provider assesses the transaction risk. If the transaction is determined as high-risk, the transaction goes through a challenge. In other words, it prompts the cardholder to verify their identity using biometrics, and/ or two-factor authentication, i.e. a one-time password, a fingerprint, etc. If the transaction is deemed as low-risk, no further action is required on the cardholder’s end. The issuer sends the authentication result to the merchant, who in turn submits the transaction for authorization with a flag indicating the authentication result.
How to enable and activate 3D Secure 2.0 authentication?
A payment gateway can support merchants enabling 3D Secure 2. iPayGreat can provide several options, suited to your requirements, to support 3D Secure 2.0 via our payment gateway. For more information on 3D Secure 2.0 authentication and enablement please drop us a line.
Before you can start accepting 3D Secure 2.0 authenticated transactions, contact one of our tech support team members and/ or account managers to enable, activate and configure 3D Secure 2.0 transactions for major card schemes.
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Benefits of 3D Secure 2
3D Secure 2 is a powerful authentication protocol with several benefits for merchants and consumers. Better user experience and increased security are among the most prevalent advantages, along with other benefits listed below:
Enhanced user experience across devices
3D Secure 2 has gotten rid of the popup windows and full redirect bank pages that led to increased cart abandonment. When a transaction is trusted, users can purchase their goods/ services and wait for the payment confirmation message. When a transaction is deemed suspicious, the users will have to authenticate themselves with something they are familiar with such as a fingerprint scan or an OTP.
Rich data exchange means more secure payments
3DS2 enables issuers to perform Risk-Based Authentication (RBA). This process facilitates the exchange of over 100 data points during a transaction, including user geo-location, device ID, shipping address, previous transaction history, to assess the risk entailed for that specific transaction. Risk-based authentication allows the issuers to authenticate their cardholders without asking for any additional information on the majority of the transactions. Essentially, when a transaction is perceived as risky, the authentication goes through a "challenge" flow, where the user may be prompted to provide further verification. According to Visa, less than 5% of transactions are expected to be stepped-up for additional verification, such as a one-time-passcode.
Reduced risk of fraud
A significant selling point for 3D Secure is that it reduces the risk of fraud. This extra layer of security helps merchants accept card payments only from legitimate customers. Even if the customer's card number and card details are used fraudulently, it is less likely that a fraudster would also have access to the cardholder’s 3DS pin or OTP. Thus, the risks of fraud are significantly reduced.
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