Online merchants integrate 3D Secure into their checkout processes to add an additional layer of security to card transactions. When a customer initiates a payment, the merchant’s website contacts the issuing bank to authenticate the transaction. This may involve a quick verification step, known as the "challenge flow," where the cardholder might enter a one-time password or confirm a push notification from their banking app. Alternatively, they may sail through with no action required —thanks to frictionless 3DS. Once authentication is successful, the payment proceeds. If the process fails, however, the transaction may be declined or flagged for further review. The benefit of 3D Secure is significant: if an authenticated transaction turns out to be fraudulent, liability shifts from the merchant to the card issuer.

Under the liability-shift feature, if a transaction receives secure authentication through 3DS and is later found to be fraudulent, liability for the resulting chargeback shifts from the merchant to the card issuer or issuing bank.

Fraud rate is five times lower in Europe compared to the United States!

‍Given the potential for lost sales due to frustrated customers, merchants should prioritize refining their checkout experience. It's essential to communicate proactively with customers about the possibility of identity verification during purchases. By explaining that these steps help protect their financial information, merchants can build trust and ensure a smoother shopping experience.

How is your business implementing 3D Secure to enhance security and customer satisfaction? Drop us an e-mail if you would like to know more about how we could help your business info@explicitselection.com

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