3D Secure is an authentication protocol to improve the exchange of online transaction data and protect consumers. It helps merchants meet the EU’s Strong Customer Authentication (SCA) requirements in place since 2019
With the European Union’s Strong Customer Authentication (SCA) standards now mandatory for all online transactions in Europe, card issuers and banks must implement two-factor authentication for all card payments. Part of the EU’s Payment Security Directive 2 (PSD 2) regulations, SCA is intended to better protect consumers from fraud and abuse, and applies whenever an EU-based shopper makes a payment.
While some exemptions apply, merchants shouldn’t rely on these exemptions when it comes to accepting online payments in Europe. By adhering to the most secure flows, merchants can ensure the highest approval rates and reduce the risk of a transaction being declined due to non-compliance.
Under the previous regulations governing payment security in Europe, a protocol known as 3D Secure 1.0 was used in order to verify digital payments. With the new regulations, 3D Secure 2.0 is an updated version of the protocol that makes it easier to collect and process customer payment information in accordance with SCA requirements.
Current challenges of 3DS implementation in Europe stem primarily from the failure to complete payment flows. This can be due to unfamiliar authentication processes or technical difficulties, or broken flows at the backend.
PayU’s data analysts recently discovered that many banks did not implement all requirements such as responsive web design, two-factor authentication, and other technological conditions that significantly affected customer experience. Conversion rates due to these gaps have plummeted to 30%-40%.
SCA is now mandatory for all online card payments in Europe. With 3D Secure, you don’t have to worry about regulatory compliance because we have taken care of it for you.
3DS is beneficial in more than just payments. Adding cards to digital wallets, the use of open banking services, as well as financial services apps are all utilizing 3DS flows. This might soon contribute to the spread of 3DS 2.0 beyond Europe to become an increasingly global standard.
3D Secure is a security protocol for online card payment transactions designed to protect consumers from fraud and unauthorized transactions. It is important because it helps ensure that the person making the payment is the actual cardholder, thereby enhancing the security of online payments.
3D Secure protects your payment information by introducing additional authentication steps during online payments. This includes passwords, SMS codes, or biometric data, making it more difficult for your payment card to be misused.
3D Secure is used by merchants, banks, and payment processors to secure online transactions. It can also be activated by cardholders who desire higher protection.
3D Secure helps merchants by enhancing transaction security and reducing the risk of fraud. This can lead to increased customer trust and lower costs associated with chargebacks for unauthorized transactions.
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