Online merchants integrate 3D Secure into their checkoutprocesses 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 aone-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. Ifthe process fails, however, the transaction may be declined or flagged for further review. The benefit of 3D Secure is significant: if an authenticatedtransaction turns out to be fraudulent, liability shifts from the merchant tothe card issuer.

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

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

‍Given the potential for lost sales due to frustratedcustomers, merchants should prioritize refining their checkout experienceIt's essential to communicate proactively with customersabout the possibility of identity verification during purchases. By explainingthat these steps help protect their financial information, merchants can buildtrust and ensure a smoother shopping experience.

How is your business implementing 3D Secure to enhancesecurity 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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