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To 3D Secure or not to 3D Secure? That is the Question

To 3D Secure or not? That is the Question

Payments

To 3D Secure or not to 3D Secure? That is the Question

Questions have been raised whether to opt for 3D Secure or not? This dilemma affects the merchant’s bottom line as it is directly connected to the end user experience, which is pathetic to say the least by implementing additional steps to verify the user in the checkout process. However, 3D secure remains the most feasible, low cost, low resource consuming option for merchants to protect themselves against unauthorized chargebacks.

Between Yes and no, we decided to provide you with the full information about 3D secure, who benefits? Who loses? & who should use it? That could help you to decide whether to go for 3D secure or not.

What is 3D secure?

It’s an additional layer of security during the Card payment process when shopping online. The page itself is managed by the bank & is independent to the merchant’s website but the authentication itself is done by VISA or MasterCard (depending on your card). Depending on your bank you may be requested to input the 3Ds password or a dynamic OTP (one time password) send to your mobile phone each time you attempt to make a payment.

Who benefits?

The consumer’s funds are protected by an additional layer of security preventing any misuse of the Card online.

The merchant is protected by the ‘Liability shift’ when accepting 3Dseure transactions. This insinuates that the merchant is not made liable for any fraudulent chargeback received on any 3Dsecure transactions as it has been verified by the card scheme.

Who loses?

Adding an additional step in the checkout process invites another chance for the conversion rates to drop. Either due to technical reasons or because the page did not load correctly, infrequent shoppers forgetting passwords or maybe entered the wrong password, sometime even simple typos lead to the payment being rejected, negatively impacting the merchants conversion rates. In the era of the Mobile App shopping Boom, the pesky 3Dsecure page creates even more friction on the small screen ultimately hampering the bottom line businesses.

Consumers in emerging markets are not educated about 3Dsecure and tend to get frustrated when attempting to repeatedly retry rejected payments. A first time novice shopper unaware of 3Dsecure may even back out of the checkout process upon landing on the unfamiliar 3Dsecure page.

Economics of 3Ds: Who should use it?

Small merchant’s fresh in the e-commerce space have limited resources to look after payment security themselves & hence can make full use of the 3Dsecure product to protect themselves from fraud attacks. This even has a positive effect on the consumers who find it difficult to trust new players in the market, in this case the 3Dsecure page instills trust in the mind of the consumer.

Large big branded merchants are able to hire fraud prevention specialists and deploy expensive anti-fraud software products to combat fraud attacks, doing away with 3Dsecure completely and focusing on what really matters – higher conversation rates which ultimately translates to higher profits.

What have your experience been like with 3D Secure? Be sure to leave us a comment below or reach out on twitter to share your story. And, if you have any questions, send us a tweet @PAYFORT.

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Dalia El Gammal

Marketing Specialist PAYFORT

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