Arcot's experts share industry insights to keep you informed.

AUGUST 2024

3DS Transaction Flow: A Modern Approach

As eCommerce grows, the need for robust, secure payment mechanisms becomes even more critical. 3-D Secure (3DS) plays a vital role in enhancing online transaction security by verifying the legitimacy of transactions before authorization. 3DS introduces pre-authorization steps that exchange metadata and intelligence between the cardholder, merchant, and issuer to enhance security and approval rates. This makes the transaction process more dynamic, ensuring both higher fraud protection and higher approval rates.

The Role of Merchants in 3DS

Initially merchants used 3DS to shift liability in high-risk transactions, but merchants are learning that selective use of 3DS leads to challenges. Issuers may struggle to assess the risk at the Authentication Control Server (ACS). Transactions are also more likely to face declines in authorization, leading to false declines. Today, many merchants are leveraging 3DS to improve approval rates and reduce fraud. By sharing comprehensive data with issuers via 3DS, merchants help reduce false declines and increase the likelihood of legitimate transactions being approved.

Read the  Full Article for an outline on implementation best practices for both merchants and issuers as well as important innovations for the customer in today's 3DS protocol. Merchants and issuers alike must continue to evolve with the latest security technologies to stay ahead in the ever-changing landscape of online payments.

Interested in your company’s 3DS performance, how you compare to peers, and where you’re falling short? Sign up for the Arcot Authentication Scorecard. There is no charge to receive this data. Arcot believes in data-driven decision making and ecosystem collaboration for safer transactions for all.