What is 3D Secure: -

3D Secure stands for 3 Domain Server, there are 3 parties that are involved in the 3D Secure process:

  • The company the purchase is being made from.
  • The Acquiring Bank (the bank of the company)
  • VISA and MasterCard (the card issuers themselves)

3D Secure is a technical standard created by Visa and MasterCard to further secure CNP (Card-holder Not Present) transactions over the Internet. 3D Secure protects a buyer's credit card against unauthorized use when shopping online. This simple service enables buyers to validate transactions you make over the internet by requesting a personal code (usually sent to your cell phone or email address as a one-time PIN). It helps protect against fraudulent use by unauthorized individuals.

How 3D Secure works: -

The name 3D comes from the three-domain model used to provide the additional layer of secure authentication between the financial authorization process and online authentication process. The three domains used to provide this security are:

  • Acquirer Domain: The bank and the merchant receiving the transaction payment.

  • Issuer Domain: The bank that issued the credit or debit card used for the transaction.

  • Interoperability Domain: The infrastructure provided for the card that’s used to support the 3D Secure protocol.

Every time, when a customer wants to make an online purchase, he will be requested to enter his card details into the payment gateway. The Gateway submits PAN to an authorized participant of the 3DS system which then checks to see if the Issuing Bank is a participant in 3DS program. If so, the ACS (Access Control Server) URL is obtained and customer is redirected to his bank. If the bank does not participate in the system, transaction is performed as non 3DS. If the card is enrolled, the bank asks the customer to provide his security code i.e. One-time password (OTP), PIN or code provided by email or SMS to prove that this is the cardholder making the transaction. The issuing bank confirms that the customer is the genuine cardholder and authenticates the credit card usage.

Flowchart of 3D Secure: -

What are the benefits of using 3D Secure?

  • Liability Shift: The main benefit to companies using the 3D Secure scheme is the availability of a liability shift for a successfully verified transaction. This offers protection by the card issuers against chargebacks as the liability is assumed.
  • No extra cost: There are no extra costs to add 3D Secure onto your account. Your acquiring bank may charge to add this onto your merchant number however you may also find that your transaction charges lower as a result of using 3D Secure.
  • Easy to set up and control: The set-up of the 3D Secure scheme is controlled within your account administration area along with the option of setting custom rules to automatically validate cards registered with 3D Secure.
  • Chargeback protection: This protection helps secure you against friendly fraud or chargeback fraud.

Article ID: 36000135244