3-D Secure Makes Payments Better for Merchants, Shoppers, Worse for Fraudsters

With the booming landscape of eCommerce and digital payments, data security has become more critical than ever. Any business that centers its services on data security, shopping convenience, and smooth user experience has more chances to win. Studies show that security is usually the backbone of a successful business.

Interestingly, businesses are adopting new ways to preserve their customers’ trust. Influenced by this, companies like Visa have brought security measures such as 3-D Secure (3DS). Later adopted by MasterCard, this security protocol adds a layer of security to your online shopping and transactions.

Need of Extra Layer of Authentication

By this time, eCommerce businesses and banking service providers have understood the direct correlation between eCommerce sales and digital fraud.

With advanced authentication technologies such as 3-D Secure, businesses can mitigate modern, sophisticated eCommerce frauds, and gain and retain their customers’ trust.

Adding an extra layer of authentication might take the customer’s extra minute but it’s worth the minute. It ensures their card details are safe and no transactions from their bank are done without their consent.

3-D Secure (3DS) 

When customers have 3DS enabled on their card, they undergo a 2-step authentication on their online purchase process. While making a payment, they will be redirected to a 3DS page with a field to enter a PIN. This PIN is generated by their bank and sent via an SMS on their registered mobile number.

Once you enter this PIN, your transaction will be complete as 3DS ensures that the payment is being done with the consent of the cardholder.

Here’s an even better part of this technology. 3-D Secure does not elongate all payment processes. It will ask you to enter the PIN only when your bank notices a security threat or possible issue. In other words, 3DS is advanced and supplicated enough to prevent modern fraud.

Fraud Prevention with Advanced 3-D Secure Measurements

The advanced and seamless 3DS used now had its catches in its initial phase, mainly the clumsiness in user experience. However, in the present time, these hiccups are tackled and recent updates have streamlined this technology.

Issuers are using more intelligent data to preserve the seamlessness of user experience. Users can choose, for example, their preferred authentication methods to complete their 3DS-enabled payments.

Unlike before, the technology, at present, is using behavioral and real-time authentication. It means the issuers can make informed decisions related to payment risks based on the user’s device behavior and keystroke patterns while making transactions.

The Role of AI and Machine Learning in Mitigating Frauds

A crucial step in this regard revolves around future-centric artificial intelligence (AI) and machine learning (ML) models to prevent potential fraud.

The predictive capabilities of these technologies are a huge, steady hand to make sure the large user data with merchants and financial institutions is secure. All we need is AI and ML models to be kept under check and updated with every new technology and eCommerce advancement.

And this is happening. The future promises significant and continuous advancements in security technologies such as passkeys and digital wallets. Consequently, what’s ahead are more user-friendly transaction experiences in a secure digital infrastructure.

It’s a no-brainer that AI has a huge role to play in fraud prevention. So, businesses and financial institutions need to keep up to date with it.

Talking about the seller’s point of view, technologies like 3-D Secure can be a challenging tool. The reason is simple. Long transaction processes can lead to abandoned carts. No business would want such a huge hiccup.

However, there are ways to mitigate these risks too (or at least lessen their impact to a great extent). The issuers need to receive better data with more 3DS transactions to detect fraud more accurately. Only continuous innovation in AI technologies can make it possible.

The digital landscape is booming and it should be in a spiraling movement, for sure. The need is, however, to create secure yet user-friendly and convenient experiences.