My bank offers 3D Secure card authentification. Whats that?

3D Secure offers an extra layer of protection for cardholders and merchants. Customers are asked to enter an additional password after checkout completion to “verify” they are truly the cardholder.
 How does it work?
Developed by Visa and licensed by MasterCard, 3D Secure stands for “Three Domain Secure” – the domains being:
  1. the acquiring bank (retailer’s bank)
  2. the issuing bank (the cardholder’s bank)
  3. the infrastructure that supports the 3D Secure protocol
On participating sites, after completing the merchant’s checkout process, the customer is asked to provide a password (if previously enrolled) or to set up his or her Verified By Visa or MasterCard SecureCode credentials. The customer is either redirected to the issuing bank’s website for authorisation, or kept within the merchant’s own checkout process through a frame.

The intention behind the system is that cardholders will have a decreased risk of other people being able to use their payment cards fraudulently on the Internet. Copying card details does not result in the ability to purchase over the Internet because of the additional password, which is not stored on or written on the card.

It's an added security for merchants as well since the merchant does not capture the password, there is a reduced risk from security incidents. Typically, when a transaction is disputed, it’s the merchant who pays the price. 3D Secure ensures liability shifts from the merchant to the issuing bank. This alone may make worldwide implementation of 3D Secure worthwhile for your business.

 Is it Required?
MasterCard has made it mandatory for merchants who wish to accept Maestro cards in the UK, and Verified by Visa is required in Italy. It is strongly encouraged in other countries, especially those that are high risk for fraud, and may become mandatory in the future. Merchants who refuse to participate may face fines and other penalties if “caught.”

The UK has the highest credit card penetration in Europe, and is often the “sandbox” for new security products like AVS, 3D Secure, contactless payment and reverse authorisation. According to Cybersource, 73% of UK online retailers currently use 3D Secure, and another 10% are planning to implement this year.

Couple this with the aggressive awareness and push to enroll from issuing banks, UK shoppers seem to have grown accustomed to the scheme, and the impact on conversion is less dramatic as in other markets.

 Educate customers about 3D Secure
Verified by Visa and MasterCard SecureCode both have preamble you can use in your checkout that helps the customer who’s not sure what’s going on understand the benefits of the scheme. You can craft your own copy if you wish, but make sure you communicate the increased security the cardholder will enjoy while enrolled in the program.

You should mention there is no charge for the service, and include a link to more information (that opens in a new window). Place the messaging where it will be most noticed, close to the frame or Submit Order button.

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