With the rise in eCommerce popularity, more and more people are opting for the convenience of shopping from their homes or mobile devices. This has made credit card transactions as common as paying with cash at a gas station.
However as the number of transactions grows so does the concern for theft and fraud. To tackle this issue there has been a surge in the development of security and payment solutions aimed at safeguarding against activities and ensuring the continued expansion of this industry.
Companies like Visa and Mastercard along with card associations are investing heavily in creating cutting edge technologies to improve transaction security and convenience. One such innovation is 3D Secure, which demonstrates their dedication to advancing payment systems. This XML based protocol enhances data exchanges between acquiring banks and issuing banks to provide added protection for transactions.
Today 3D Secure is widely used by merchant service providers who either include it in their payment gateways or endorse its implementation. However, the latest version introduced in 2015 has not yet been universally adopted.
Let’s delve into the concept of 3D Secure and how it can be practically applied to benefit your business.
What is 3D Secure?
3D Secure stands out as a pioneering protocol that boosts security by introducing two-factor authentication commonly referred to as 2FA for cardless transactions. If your card issuer supports 3D Secure you will encounter a verification step when making payments without using your card.
Another approach could involve setting up a PIN on the payment platform or incorporating authentication, like fingerprint scanning. The system has been cleverly designed to ensure that cardless transactions rely on a factor that would be extremely challenging for a criminal to access even if they somehow obtained your card details.
The name originates from the concept of three domains involved in the payment process; the initiating domain, the receiving domain and the interoperability domain (which encompasses all systems in between).
EMV 3D Secure serves as a communication platform that simplifies customer authentication, during transactions where the card’s not physically present. When cardholder verification is needed it allows customers to actively verify themselves with their card issuer.
The 3D Secure system consists of three domains, also known as “Three Domain Secure.”
The acquirer domain initiates 3D Secure transactions. Involves both the bank and the merchant receiving the funds.
The Interoperability Domain acts as a bridge between the Acquirer Domain and the Issuer Domain providing the infrastructure for implementing the 3D Secure protocol.
The Issuer Domain refers to the bank that issued the card used in the transaction and is responsible for authenticating Secure transactions.
What Does 3D Secure Protection Mean?
When making an online card transaction, an extra security step known as 3D Secure can be activated. This additional layer of protection benefits both customers and merchants, by enhancing security measures. With 3D Secure enabled you will need to confirm each transaction using your PIN.
The term “3D” stands for “three domains ” representing the three parties involved; the card issuer, the receiving merchant and the 3DS infrastructure platform acting as an intermediary, between the buyer and seller.
Is There a Downside of 3D Secure?
Some users may find it challenging to distinguish whether a 3D Secure pop up is legitimate as these pop ups can redirect you away from the payment page.
Many users suspect these pages of being phishing attempts. On the contrary 3D Secure relies solely on one time codes ensuring that none of your information is jeopardized.
Moreover the identity verification process during the checkout phase, for 3DS does lengthen the procedure; however isn’t it worthwhile to spend a few moments to safeguard your information?
Understanding How 3D Secure Works
3D Secure works by requiring users to go through an authentication process when conducting online transactions. The specific method may vary based on each card issuer. Typically involves entering a PIN or password or utilizing some form of verification.
Imagine this scenario; you’re, in the midst of purchasing concert tickets from a seller.
Once you’ve input your card details just click on the “Pay” button. If you’re not using 3D Secure your payment will go through long as the information’s correct. This means that someone who has your card details could potentially access your funds.
If your card is 3D Secure enabled an extra step is needed to complete the transaction. You might have to enter a generated number from your banking app, for authentication or use the scanners on your device. The system’s effectiveness relies on protecting something that would be hard for a malicious person to steal or duplicate.
Card issuers typically handle the setup of 3D Secure so consumers usually don’t need to do anything to use it. If you’ve followed all the steps to get your card the authentication process will kick in automatically when you make a payment.
The Benefits of 3D Secure
One of the benefits of 3D Secure, for consumers, is its ability to safeguard their funds. By using 3D Secure, the likelihood of criminals successfully making payments from an account is significantly reduced.
Businesses benefiting from 3D Secure also enjoy the advantage of liability shifting. A significant perk of 3D Secure is that if a payment turns out to be fraudulent the card provider, not the vendor, is held responsible for any chargebacks. This system guarantees the cardholders protection. Ensures they get their money back if it’s lost.
The 3D Secure protocol enhances consumer safety by preventing vendors from accessing authentication data during transactions reducing cybersecurity risks. The users’ PIN or biometric information remains confidential and cannot be viewed or stored by the recipient during fund transfers. In case of a data breach, vendors take measures to prevent any information leakage.
In essence, 3D Secure offers users protection against data breaches, identity theft and financial losses while also shielding vendors from chargeback disputes.
