Businesses selling goods and services online have access to sophisticated customer relationships and sales systems. But they are not alone in having access to cutting-edge technology. Even traditional “bricks and mortar” retailers like restaurants, physical therapists, and specialist car part vendors use online systems to complete sales which customers then pick up or use at physical locations.
And just like purely online retailers of goods and services, these hybrid businesses must make sure their credit card payment processes are up to scratch. The risks of fraud, cybercrime and even chargebacks can all wreak havoc on what should be a simple thing. One easy way businesses can limit risk is with a reliable 3D secure authentication system.
3D secure is a fraud prevention messaging protocol that provides an additional layer of security for online credit card transactions. The name refers to the three domains which work within it: the retailer; the issuer; and the payment system.
The protocol allows customers to verify details with their credit card issuers when making card-not-present (CNP) purchases.
It has been around in one form or another since 1999 and is trusted by all the major credit card providers, including Mastercard, Visa, and American Express.
The “3DS” protocol is constantly evolving to help businesses and customers adapt to technology. For example, the latest version, 2.3, includes systems designed to help users of smart speakers like Amazon’s Echo proceed through the check-out process securely.
Using 3D Secure helps those involved by:
It’s no exaggeration to say that fraud is one of the biggest problems consumers face. The risk has grown significantly since the pandemic as many of us were forced to shop online. In the United States alone, the Federal Trade Commission reported in February that:
“consumers reported losing more than $5.8 billion to fraud in 2021, an increase of more than 70 percent over the previous year. The FTC received fraud reports from more than 2.8 million consumers last year, with the most commonly reported category once again being imposter scams, followed by online shopping scams.”
Despite the protections in place, paying with a credit card online can still make some consumers nervous. As a result, chargebacks, which happen when a customer disputes a transaction, occur both through fraud and error.
Instead of approaching the seller direct, some customers ask their credit card company to intervene. Reversing the charge can be easier for the card issuer than getting into a debate with the merchant, resulting in lost revenue for the business. 3D secure helps deal with this by limiting “not authorized” reason codes when going through online checkout.
For businesses selling online, few things are more frustrating than seeing abandoned shopping carts. 3DS helps by giving customers a valuable trust signal during the sales process. It also triggers a psychological commitment in the customer’s mind, motivating them to complete the transaction.