3D Security for Online Payments

3D Secure (3DS2) is a robust tool for enhancing the security of online transactions by authenticating customers and reducing fraud.

It is an internationally recognized protocol that verifies online shoppers either...

1. by validating purchase information, devices, and shopper details through the issuing bank, or
2. by prompting manual authentication via SMS, email, banking app, or web app.
   
   

This extra layer of security not only helps deter fraud but can also shift liability for chargebacks to the issuing bank, alleviating the financial burden on retailers.

In this guide, we’ll walk you through the essentials of 3D Secure, including setup, customer experience, costs, and its role in chargeback protection. For more information, please reach out to your payment provider.

How do I sign up for 3D Secure?

• To sign up for 3D Secure, contact your payment provider to request activation. They will guide you through the setup process and inform you of any associated fees.
• Once it’s activated, simply let us know, and we’ll enable it on the Buddi side at no additional cost.

What does 3D Secure look like to customers?

• Most customers, won’t notice a difference. They will see the standard credit card form for including CC Number, Expiry, and CVV. For others deemed a higher risk they will be provided a challenge from the bank. Normally this challenge is a pin code sent to their phone number on file at the bank that they will need to enter before finishing their checkout.

Are there costs associated with implementing 3D Security?

• Buddi provides this security for FREE. However, there will be a fee on the payment processor side of things.

How is it decided which cards receive a challenge and which ones don’t?

• That is decided at the bank level, we at Buddi have no control over this.

Can 3D Secure eliminate all of my chargebacks?

• No. "Not authorized" reason codes are the only chargebacks 3D Secure can provide protection from. Customers can still file disputes related to customer service issues or merchant errors.
  
  The issuing bank must be 3D Secure enabled to verify transactions. If the cardholder’s issuing bank is not 3D Secure enabled, the transactions will return a "non-verified" response. Merchants aren't protected from liability in these cases.
    

Article: Chargebacks
 

More information on 3D Security:

https://www.verifi.com/chargebacks-disputes-faq/what-is-3d-secure/

https://www.chargebackgurus.com/blog/understanding-frictionless-3d-secure-2.0-technology