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3D Secure Authentication Explained

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Last editedNov 20212 min read

If you accept credit card payments from customers, you’ll want to provide the safest possible shopping experience. In addition to storing and sending card data using secure methods of transmission, 3D secure authentication offers a better way to protect user details when shopping online. What is 3D secure authentication, and how does it work to reduce the risk of identity theft and fraud? Here’s what you need to know.

What is 3D secure authentication?

First launched in 2001 by Visa, 3D secure authentication is now widely used by all major credit and debit card issuers. It’s a fraud prevention safeguard designed to provide an additional layer of security in card-not-present transactions. For example, the 3D secure authentication method applies when a cardholder makes a purchase using an online payment gateway.

How does the 3D secure authentication method work?

3D secure authentication adds an extra step to the payment process, redirecting customers to their card issuer during checkout. Here’s how it works:

  1. A customer enters payment details on the checkout page of a website.

  2. The customer is redirected to their card issuer’s 3D secure web page.

  3. The customer enters a one-time authentication code or password.

  4. The details are verified by the card provider and payment is approved.

  5. The customer is directed back to the main payment page.

In some cases, there’s no need to enter any password or authentication code. Instead, the bank or card issuer can automatically verify the transaction.

What does 3D secure authentication error mean?

While in most cases a transaction will go through without issue, sometimes you’ll see a “3D authentication failed” error message. This means that the cardholder hasn’t entered their details correctly. A 3D secure authentication error could be due to everything from a mistyped card number to an incorrect expiration date. If the error continues, the cardholder will need to contact their credit card issuer for assistance.

Benefits of the 3D secure authentication method

3D secure authentication isn’t as widely used in the US as it is in some other regions such as the EU and Australia where it’s mandatory. However, there are numerous benefits to offering this added layer of security to your customers. Here are just a few reasons to consider 3D secure full authentication:

  • It helps prevent card details from being stolen

  • It provides an added layer of fraud protection

  • It protects against unauthorized chargebacks

  • It passes on liability to the card payment provider

After a transaction has passed the approval process, the merchant is no longer liable. Instead, the card payment provider will be responsible for dealing with chargebacks and refunds. This means that 3D secure authentication offers benefits not only to the customer, whose card details are protected, but also to the vendor, who receives liability protection as well.

How to set up 3D secure authentication

To set up 3D secure full authentication on your website, you can get started by linking a 3D secure API with your existing shopping cart. Popular platforms like Magento and Shopify make it easy to enable 3D secure automatically. It’s also included as a standard feature of numerous payment gateways, along with IP address and CV2 checks.

You’ll need a merchant account set up to accept credit card payments with 3D secure authentication. The purpose of the merchant account is to offer a separate holding area for processing funds.

It’s also important to meet all PCI compliance regulations at the same time. PCI compliance keeps your customer data safe during the storing, processing, and transmission steps of any transaction. Together with 3D secure authentication, this provides the safest possible shopping experience for you and your customers.

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