What is 3D Secure (3DS)?
3D Secure (3DS) is an online card payment authentication protocol that adds an extra step by verifying the cardholder’s identity with the issuing bank during checkout to reduce fraud. This helps merchants and consumers mitigate unauthorised use of card data and meet regulatory requirements.
Example of 3D Secure
Checkout Begins: Customer enters card details on an e-commerce site.
3DS Invocation: Merchant’s payment gateway sends authentication request to issuer with transaction context (amount, device info).
Risk-Based Assessment: Issuer reviews data. If the transaction seems routine and low-risk, it may be approved without a user prompt.
Challenge (if needed): If risk flags appear (e.g., unusual amount or location), the issuer prompts the cardholder for a one-time code sent via SMS.
Completion: Upon successful challenge response, the issuer either approves payment or declines.
Importance of 3D Secure
3DS lowers the risk of stolen-card fraud by confirming the actual cardholder during checkout.
In regions with strong authentication rules, 3DS helps merchants comply with laws.
Many card schemes shift liability for fraudulent chargebacks to the issuer when 3DS authentication succeeds, protecting merchants.
Visible extra authentication can reassure customers about security. Modern 3DS aims to minimise friction by allowing risk-based “frictionless” approvals.
Merchants that implement 3DS often see higher net approval rates and fewer declines due to suspected fraud.
