3D Secure (3-domain structure), also known as a payer authentication, is a security protocol that helps to prevent fraud in online credit and debit card transactions. This additional security was initiated and created by Visa and MasterCard and it’s branded as ‘Verified by Visa’ and ‘MasterCard SecureCode’ respectively.
The payer authentication is a three-part process, so there are three parties involved in the process: the issuer (such as Visa or MasterCard), the acquirer, and the interoperability domain (such as payment system).
When you, as a merchant, have 3D Secure enabled on your website and your customer uses the card that is enrolled in the 3D Secure program the process looks as follows:
- The customer enters their credit or debit card information in the payment form
- QorCommerce contacts a directory server and gets the message that the card is registered in the program
- The customer sees the 3D Secure page when they need to authenticate themselves to the issuing bank by entering the password or a one time PIN
- The result of the 3D Secure authentication goes to QorCommerce and then we submit transaction details to the acquiring bank
- The transaction is authorized by the acquirer
- The customer can see the response about whether the transaction is successful or failed
One of the advantages of 3D Secure is that it reduces fraud. It also makes shopping/commerce safer online, nourishes brand loyalty, it is easy to use, customer confidence improves on websites and therefore increases spending online.
3D Secure has certain limitations: first, not all cards are currently participating in the program authentication payer scheme and secondly, it does not restrict chargebacks to happen but reduces the cost of fraudulent chargebacks.
As regards to chargeback liability, 3D Secure should be seen as an additional layer of protection provided by the card issuer. In fact, in the case of a fraudulent transaction, it becomes authenticated through 3D Secure, is very likely that liability will shift to the acquirer. In short, retailers are protected against misleading chargebacks since the liability is transferred.
Updated almost 3 years ago