3D Secure is an additional layer of security for online credit and debit card transactions that adds an extra step to the payment process to enhance security measures for shoppers and vendors alike. When a customer makes a payment for an online purchase, 3D Secure technology gauges if further safekeeping is needed to make sure that the rightful card owner is making the transaction. If so, the customer is directed to a 3DS page and asked for a password or PIN. The technology is named 3D Secure because every 3D Secure transaction involves three parties: the card issuer, the retailer receiving the payment, and the 3DS infrastructure platform that acts as a secure go-between for the consumer and the retailer.

For extra fraud protection, 3D Secure requires customers to complete an additional verification step with the card issuer when paying. Typically, the customer is directed to an authentication page on their bank’s website, and they enter a password associated with the card or a code sent to their phone. If a card doesn’t support 3DS or an error occurs during the authentication process, the payment proceeds normally, and liability doesn’t generally shift to the issuer, as a successful 3DS authentication hasn’t taken place.

3D Secure offers merchants several benefits, including:

• Fewer chargebacks, which means more money in their pocket.
• Mitigation of the resources associated with dispute management, chargeback penalties, and fees.
• The ability to decide which transactions require 3D Secure authentication.

However, the liability shift sometimes comes at the cost of conversion rates, as some users can find it difficult to tell if a 3D Secure pop-up is legitimate, and users often mistake these pages for phishing scams. The recently introduced 3D Secure 2.0 protocol supports non-browser-based payment methods, including wearables, in-app purchases, mobile payments, and digital wallets, and offers smoother shopping experiences while taking online payment security to a whole different level.