What is 3D Secure?
3D Secure is a security tool developed by Visa and MasterCard to combat eCommerce fraud.
It is called "Verified by Visa" (by Visa) and "SecureCode" (by Mastercard). It is often described as "the online version of Chip and PIN", though there is no PIN involved.
It involves an extra step during the checkout process, where the Cardholder is prompted to enter their “password” or some other authentication information (e.g. date of birth).
Do I need 3D Secure?
If you wish to accept Maestro eCommerce transactions, then yes, as it is mandatory. If not, check with your acquiring bank. Some require it and others don't.
Even if they don't require it, we would recommend enabling it as it provides the merchant with peace of mind. Many merchants don't consider fraud an issue until they get their first fraudulent chargeback, and then they want it ASAP.
What about Cart abandonment due to 3D Secure?
Some merchants are reluctant to set up 3D Secure because they believe that it will cause high cart abandonment.
This used to be the case, but recently some acquirers have been mandating 3D Secure for a lot of sites. This means that the public are a lot more aware and accepting of 3D Secure.
It does depend on your customer demographic though; a computer parts retailer will have almost no abandonment whereas a book retailer may have less customer awareness about it.
The best way to combat this is to inform customers before they get to the checkout that 3D Secure will be prompted for. A trial week is also advisable, to get a feel for it and maybe feedback from your customers.
Anything else I should know about 3D Secure?
• 3D Secure works by confirming that the buyer is the cardholder. If the cardholder has not set up 3D Secure yet or if their bank doesn't support it yet, it's not the merchant's fault, and therefore the merchant is not liable for fraud for the transaction.
• If the cardholder has not yet set up 3D Secure they will have the option to skip set up and proceed with the payment. They can do this a maximum of 3 times on their account, or set up 3D Secure during the payment (this will not abandon the payment).
• If you decide to use 3D Secure on your eCommerce site, sometimes it can take a while to set up with Visa, MasterCard and the acquiring bank, so do give as much notice as possible
• 3D Secure protects against fraud, not chargebacks. You can still get chargebacks for non-fraud related reasons, such as if the customer doesn't receive the goods or if the customer refutes the quality of the goods, etc.
What is your experience with using 3D Secure? Are there any other key points we should cover?