What is 3D Secure?

3D-Secure is quite popular among cardholders, but not many the purpose of it. 3D Secure or in its full-term, 3-domain secure is a payer authentication. It serves a security protocol to prevent fraud in transactions whenever you use credit and debit cards online.

3D Secure is created by Visa and MasterCard under the name that is only verified by Visa & MasterCard SecureCode. The payer authentication is a three-part process, so there are three different parties involved in this process. This includes the issuer (Visa or MasterCard), the acquirer and the interoperability domain (such as payment system).

3D Secure Activation Process

As a merchant, it is important to know the full process of 3D Secure Process. With 3D Secure, your customer will be able to do a secure transaction. But first, this is how it works:

  1. Cardholders will key in their card information in payment gateway (Cardholder Name, 16 Digit Card Number, Expiry Date, CCV, etc.)
  2. The payment gateway contacts a directory server to see whether the card is enrolled in 3D Secure
  3. The directory server responds with a message indicating that the card is registered
  4. The payment gateway uses the message to redirect the cardholder to a 3D Secure page served by the issuing bank
  5. The cardholder authenticates to the issuing bank on the 3D Secure page by entering OTP (One Time Pin) or password
  6. The result of this authentication is returned to the payment gateway
  7. The payment gateway submits card information and 3D Secure authentication result to the acquiring bank
  8. The acquiring bank authorises the transaction by communicating with the credit card network and issuing bank)
  9. The response (success or failure) is passed back up the chain to the cardholder

Benefits of 3D Secure

The benefits of 3D Secure is that it reduces the chances of fraud. It helps to make online shopping more safe and easy. As for a merchant, customers will stay loyal as they have gained trust and confidence in shopping. Therefore, they will tend to spend via online shopping.

Service Restrictions

Despite its benefits, there are also some restrictions. Not all cards are involved in the program authentication payer scheme and it does not restrict chargebacks to happen but reduces the cost of fraudulent chargebacks.

Chargeback Liability of 3D Secure

3D Secure should be viewed as additional protection provided for the cardholders. This is in case if a fraud case happens, it is very likely that liability will shift to the acquirer as 3D Secure acts as an authenticated barrier. The retailers are shielded against misleading chargebacks since the liability is transferred.