Do you allow your customers to purchase products or services online? If so, your business is vulnerable to fraudulent transactions, chargebacks, refunds, and more. Credit card fraud is becoming extremely common—in fact, 2022’s global losses from fraudulent card transactions are a staggering $34.4 billion. As fraud techniques become increasingly sophisticated, this number is expected to increase to approximately $50 billion by 2030.
Want to guarantee that all of your card-not-present transactions are legitimate? Our 3D Secure (3DS) Credit Card Authentication model may be for you! Keep reading to learn more about 3DS verification, how it works, and why it may be right for your business.
- 3D Secure (3DS) credit card authentication is a security protocol that prevents fraud in card-not-present transactions.
- 3DS authentication is designed to improve card transaction security, but has many spillover benefits.
- These benefits include easier PCI compliance, the elimination of chargebacks, more robust international transactions, and a reputational boost that improves customer trust and generates sales.
What Is 3DS Authentication?
3D Secure (3DS) is a cutting-edge security protocol designed to protect card-not-present debit and credit card transactions. A 3DS verification system forces potential customers to complete an extra authentication step that verifies they are the cardholder before processing a transaction. This is done through a simple, unobtrusive prompt from a card issuer that asks the potential customer to input a code they should have received on their mobile phone that is used to secure authentication and complete their transaction.
If you’re familiar with standard multi-factor authentication methods used for protecting consumer accounts, it’s a similar concept.
How Does It Work?
Despite its relative simplicity, this additional layer of protection is highly effective at deterring fraud and locking down your card security. The 3DS payment process works with a few simple steps:
- The potential customer enters their payment details through an online checkout page.
- The transaction details are sent over to the card’s respective bank.
- The bank responds with a challenge screen of their choice to the customer.
- The customer is asked to enter a one-time password (OTP).
At this point, the transaction goes one of two ways. If the customer successfully submits their OTP, they’re redirected to the main payment page. If they fail to submit an OTP or do so incorrectly, the transaction is identified as fraud and not approved.
One of the best parts of the 3DS verification process is that it’s an internationally viable, continuous solution to compliment card security. Our 3DS authentication system guarantees that you’re processing transactions from the proper cardholder and makes transactions easy by submitting security-friendly tokens for each transaction. This means re-authenticating isn’t necessary every single time, so your customers aren’t discouraged from making their transactions.
The Benefits of 3DS Authentication
You may be thinking that your business is getting paid either way, so why does consumer-side fraud protection matter? Well, there are numerous benefits to the 3DS payment system, some of which include:
Prevent Fraudulent Charges
3DS authentication ensures that the transaction is performed by the legitimate owner of the card—as they are the only ones capable of receiving the OTP from the issuer. By using 3DS authentication, merchants can ensure that a stolen card cannot be used in their ecommerce store.
If you’re unfamiliar, a chargeback is the return of money after a fraudulent transaction. By eliminating the possibility of fraudulent transactions, a 3DS authentication platform guarantees that you and your customers won’t have to deal with any chargebacks. This has two key benefits:
- It keeps your customers happy by ensuring their safety.
- It improves your sales results by minimizing your number of disputed transactions.
One of the greatest benefits of 3DS payment services for online purchases is the liability shift. When using a 3DS verification platform, your business is totally exempt from liability in all card transactions. The liability is moved to the card payment provider, who becomes fully responsible for chargebacks, refunds, and more.
This means that even if fraud does occur, your business doesn’t have to grapple with the consequences. You’re protected legally, which ensures that your bottom line stays intact, and can offer cost savings as the overall cost of processing the transaction is lower.
Secure Transactions and Mitigate Risk
Credit card fraud is a global problem that’s only expected to grow over the next few years. Fraud response can be especially complex and time-consuming when dealing with a foreign country. There is no shortage of challenges involved in international fraud, some of which include:
- Time Differences
- Language Barriers
- Political and Legal Considerations
Want to avoid the headache of international fraud? Make sure it doesn’t happen in the first place. A 3DS verification process will give you the confidence to accept card payments in any country, facilitating your business’s international growth.
Boost Customer Trust
Customers are more concerned with their data and privacy than ever before. Government studies have proven that consumers have never been more concerned about their data privacy. By implementing a 3DS payment service, you’re showing your customers that you understand their concerns and are taking steps to address them. This will boost your customer trust, and may make a customer choose your business instead of a competitor.
Improve Your Business’s Reputation
Reputation is everything in the modern business environment. Consumers are more aware of business practices than ever before, and all it takes is a few mistakes for your company to develop a negative reputation. Instead of being known as a company that freely accepts fraudulent transactions and could give two licks about consumer privacy, 3DS authentication systems show customers that you care.
Preventing fraudulent customers will foster a customer base you can count on. Complete confidence in your customer base will let you pivot to developing sales-generating activities. Instead of worrying about fraud, focus on conglomerating data and forming strategies to increase customer lifetime value.
Interested in Implementing 3DS Verification?
PCI Booking can help! We’re experts in all things payment. Whether you’re interested in an all-encompassing payment solution that takes PCI compliance out of your hands or want to pick and choose specific services like 3DS verification, we can help you! We’ve fielded hundreds of payment questions for businesses across the globe and have developed solutions for all of them. Contact us today to make payment concerns a thing of the past!