Spend enough time talking to merchants and you’ll hear the same concern over and over.
Turn on 3DS. Add friction. Reduce fraud. Cross your fingers that your conversion doesn’t suffer.
But modern 3DS is increasingly about something much bigger than adding another security step at checkout.
3D Secure (3DS) is a global authentication standard that allows merchants and card issuers to exchange transaction, device and customer information before an online payment is authorized. It helps issuers determine whether the person making the purchase is likely the legitimate cardholder, often without requiring the customer to complete an additional authentication step.
The important part is the data.
Visa says its 3DS solution, Visa Secure, can exchange more than 135 data elements between merchants and issuers to help them make better risk decisions.
And the results are significant.
Visa reports that transactions authenticated with Visa Secure can see up to 45% less eCommerce fraud than non-authenticated transactions.
But reducing fraud is only part of the story.
Merchants that provided more than 50% of Visa’s priority data elements saw a 6% lift in approval rates compared with merchants providing less data.
That changes the conversation around 3DS.
It isn’t simply:
How many transactions should we challenge?
The better question is:
How much useful information are we giving issuers before they decide whether to approve, decline or challenge a transaction?
For Canadian and U.S. merchants, particularly those processing significant eCommerce volume, that can make authentication part of a much broader payment optimization strategy.
Better data can help issuers recognize legitimate customers.
Better risk decisions can mean fewer unnecessary challenges.
And better authentication can mean more approvals and less fraud at the same time.
But there’s another important distinction.
3DS is not a complete chargeback solution.
It can help combat unauthorized card-not-present fraud, but it won’t prevent disputes caused by subscription confusion, refund delays, item-not-received claims, unclear billing descriptors or friendly fraud.
The opportunity is to stop thinking about authentication, fraud, authorization and disputes as separate problems.
They increasingly influence one another.
3DS isn’t about challenging more customers.
It’s about giving issuers better information so they can make better decisions.
For merchants, that distinction could have a very real impact on both risk and revenue.
If you’d like to understand where your current payment setup may be creating unnecessary hurdles or lost approvals, let’s talk.