Modern financial systems have rapidly grown their online presence, becoming a predominantly consumer-centric environment. E-commerce is also moving towards faster growth, which has made security an increasingly important topic.
According to the 2019 Consumer Sentinel Network Data Book, there were 271,823 reports of credit card fraud that year, making credit card fraud the top reported type of ID fraud in 2019. 3D Secure 2 has the potential to assist issuers and merchants in the fight against card-not-present (CNP) fraud. The new-and-improved version of the 3DS will provide an updated data stream between issuers and merchants to better notify authentication and authorization decisions.
What is it?
3D Secure (3-domain structure), also known as a payer authentication, is a security protocol that helps prevent fraud in online debit and credit card transactions. The additional security feature was initiated and created by Visa and MasterCard in 1999.
By now, 3D Secure 1 is considered to be relatively non-user-friendly, as it was simply not compatible with mobile devices. Many users still feel the extra authentication step is unnecessary, and often get irritated by it to the point where they would quit the purchase.
3D Secure 2 is the new and improved version of 3DS 1. Performing as a powerful authentication protocol with several benefits for merchants and consumers. A faster and more accurate authentication process, better UX (user experience), and enhanced security are among the most prevalent advantages. This also means no more annoying pop-up windows and having to remember long static passwords.
As the smartphone did not exist when EMV 3DS first debuted, 3D Secure 2 has added a component, allowing merchants to easily integrate the 3D Secure process into their mobile apps, making the mobile checkout experience fast and seamless whilst keeping up with the growing mobile payment trends.
In addition, the renewed 3D Secure 2.0 supports the second European Payment Services Directive, which aims to develop the electronic payments market by creating better conditions for secure payments.
As consumers become more sophisticated, the need for frictionless payment options increases, this means merchants should strive to improve their UX without jeopardizing their security.
How will 3D Secure affect me?
We know some merchants are discouraged by the risk of disrupted sales and shopping cart abandonment. However, according to Visa, the enhanced 3DS protocol will reduce cart abandonment by 70% and checkout times by 85%, since the previous version of the protocol was notoriously incompatible with most mobile devices, the new update should ensure frictionless flow as well enhanced security.
All in all, the update is a great improvement for everyone involved, allowing merchants to provide protection across multiple platforms with easy integration into their systems whilst reducing the risk of fraud and wrongly declined purchases.
Keep in mind!
According to the European Union, Strong Customer Authentication (SCA) will become the compulsory authentication method for online transactions by January 2021. So, in order to ensure that your payments will also work in the upcoming year, kindly get in touch with your home bank to start the process of making the required changes. All non-3DS accounts will not be able to make further payments as of the 1. January 2021.
With EveryPay you have nothing to worry about as we have already implemented the 3DS protocol some time ago. For more information get in touch with your home bank or EveryPay directly.