For safer Online Payments, use 3D Secure Protocol

Do you fear charge backs, or fraud or any criminal activity occurring on your site? Or as a user, do you fear your card information being misused by someone else?

To counter several concerns over online shopping, companies like Mastercard and Visa have introduced a new measure in online shopping security: the 3D Secure system.

The Growth and Acceptance of E-commerce

We all know that the E-commerce today is growing at an amazing rate. One is able to buy virtually anything that they need from the internet, at any time, any place and send it to any person and get it delivered in any part of the world. There are several websites, selling several different products and catering to all age groups. Hence, it is crucial now, than ever, to be sure that your information is safe, secure and as a merchant that there is no fraud or criminal activity on the site.

What is the 3D secure system and how does it help?

Online transactions are categorized as the ‘Cardholder Not Present’ (CNP) transactions. Earlier, there was no way to confirm if the card is really in the right hands. Also, there was significant number of transactions that had to be refunded as cardholders denied the transactions. Hence, it became very difficult to plead against such transactions and refunds.

The 3D Secure technology is developed to reduce the chances of fraudulent card use by verifying the user at the time of the transaction and hence reducing your chances of disputed transactions and charge-backs.

As of 1 January 2010, all payments you receive through UK Website Payments Pro will need to be processed via 3D Secure.

Now, what are the benefits of 3D Secure?

  • A major attraction to a merchant is that once a cardholder is registered and has input their correct 3D Secure password during a transaction and is successfully authenticated (assuming they are acting within the law), the chargeback arising from the cardholder denying that they authorized the transaction, is shifted from you (the merchant) to the cardholder’s issuing bank.
  • If a customer is not registered and because the transaction is checked for 3D Secure compliance, this would give a similar protection from the customer denying that they processed the transaction (providing the customer’s bank is participating in the 3D Secure scheme).
  • Increased card holder confidence, leading to increased sales. Studies and research shows that currently approximately 50% of cardholders have not participated in any online transaction… This is a huge potential market!
  • There is no additional fee.

There are however, limitations of the system, but overall, the 3D secure system does increase system and is certainly one step above the present scenario.

-By Neha Gulati


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