3D Secure Authentication: What Is it, And Why Do I Need It?

E-commerce has grown in popularity in the last decade, creating a thriving global market able to supply almost anything a consumer needs, but alongside this flexible platform comes risk. It’s incredibly easy for an individual to become the victim of identity theft, which can be damaging to both a consumer’s faith in online purchases and their own credit.

To protect customers and their credentials, it’s important to have security measures in place to authenticate their identity before a purchase can complete. While a number of these have been in place for years, such as requiring security numbers and sort codes to finalise a transaction, you can use 3D Secure Authentication to add a new layer of safeguards for your consumers.

What is 3D Secure Authentication?

Originally created by Visa almost two decades ago, 3D Secure Authentication is a program that uses many layers of consumer and merchant information to provide additional security for card-not-present purchases, including any purchases made online.

As the name suggests, 3D Secure Authentication uses a three-level system to verify whether a transaction is legitimate and should proceed based on numerous variables. These are:

Acquiring Party: Where is the bank receiving the payment based? Who is the merchant, where are they based, and what does the merchant sell?

Issuing Party: Where is the bank sending the payment based? Who is purchasing the products and which card is being used?

Interoperability: An integrated interaction platform that allows engaged parties to interact and exchange details, finalising the purchase in a secure environment.

Using Secure Sockets Layer (SSL) protocols and Extensible Markup Language (XML) messaging, 3D Secure Authentication provides a digital certificate of authenticity for each party before allowing exchanges to finalise, adding an extra layer of security for both consumers and sellers.

How does 3D Secure Authentication Work?

When a purchase is initiated, a customer will be redirected to an external, secure page to set up a password or reiterate one they’ve already created, information that is stored separately from other details, is not present on merchant servers and is not printed on a physical card. 

As such, someone using a stolen card in an environment that doesn’t match up with expected credentials will be prompted for a password. One that would be extremely difficult for them to discover, without intensive time and money expenditure. Most often, it deters potential identity theft or fraud attempts simply because it’s more difficult, safeguarding the card owner.

Should I Use 3D Secure Authentication?

There are a number of pros and cons to consider when deciding if 3D Secure Authentication is right for your business. So what are these pros and cons, and are they worth the potential risks?

Pros and Cons: Your Business

First, let’s consider the pros of 3D Secure Authentication on your business. An obvious pro is the added protection for your consumers, which can increase customer satisfaction and trust in your brand. You’re also not liable for chargebacks on purchases using 3D Secure Authentication, which can save your company vast amounts of money in the long run. You can rest assured your company and your customers are benefiting from the added security.

The cons are less obvious. As with any system for businesses, there’s an initial set-up cost, which can severely affect the financial stability of a small business. It will also incur maintenance fees from the service provider, which can increase monthly overheads. 

Pros and Cons: Your Customers

The bonus security for your consumers can also deter purchases, as added steps cause potential confusion and frustration for the less-technologically savvy. It should also be noted that 3D Secure Authentication isn’t infallible; consumers often create weak, simple passwords that they find easier to remember, undermining the added security.

In addition, adding an extra failsafe to purchases will inevitably slow the speed of transactions. The internet is known for the speed and ease of purchase, something 3D Secure Authentication will affect as extra pages load, consumers are diverted to separate pages or unexpected pop-ups disrupt the ease and rapidity they’ve come to expect. 

Conclusions: The Final Word

So is 3D Secure Authentication Worth The Hassle? If you can afford the overhead costs and time needed to install, then yes. Protecting your consumers and business is far more important than concern over dissuaded sales, and consumers that understand 3D Secure Authentication will be grateful for the extra protection being provided.

About the Author: George J. Newton is business development professional who writes for AcademicBrits.com  

Image: Unsplash

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