In today’s digital landscape, it is crucial for businesses to inspire confidence in their customers to ensure secure payment card transactions. The global pandemic has resulted in a significant increase in online transactions, with the number of electronic sales in the US for May 2022 surpassing the total sales for the entire Christmas season of 2021. Similarly, eCommerce sales in Germany, the market leader in this area, are increasing by 20% annually. However, with the growth of e-sales, fraudsters have become increasingly interested in stealing payment card credentials and making unauthorized purchases. To protect cardholders from such fraud, many European countries are planning to require strict customer authentication (SCA) under the Payment Services Directive 2 (PSD2).
One effective way to reduce the risk of fraud while complying with the new requirements is through the use of 3D Secure technology. In brief, 3D Secure, Visa Secure or SecureCode, is a security protocol designed to protect online transactions by authenticating the cardholder before authorizing payment. The protocol works through the three domains of the merchant, payment system, and card provider to provide additional security for payments.
Previously, early versions of the 3D Secure protocol had shortcomings that negatively affected the conversion rate. However, these issues have been addressed, and the updated version of the protocol has several advantages. For example, the ability to share contextual transaction data, exclusion of additional cardholder verification steps in low-risk transactions, and the protocol working simultaneously through various channels, including mobile devices.
To improve the authentication process further, modern card programs use the latest authentication technology, such as fingerprint scanning, facial or retinal scanning, and voice recognition. Incorporating these innovations into a mobile app can significantly reduce the number of steps needed to make a purchase, thereby improving the user experience.
3D Secure technology is not just a tool for risk management but also helps in building client trust. A survey conducted in the US and UK found that most respondents were willing to go through additional authentication steps if it meant improving payment security and protecting personal information. As such, 3D Secure is an essential part of eCommerce, ensuring compliance with regulatory requirements and creating an optimal environment for making seamless and secure purchases in virtual space.
Wallester, a leading card issuing platform, helps companies manage their 3D Secure settings to simplify cardholder identification without compromising payment security. All cards issued through the platform support 3D Secure technology, saving card program providers from additional integration costs through third-party vendors.