3D Secure from the Merchant's Point of View

What is 3D Secure?

3D Secure (3DS) is a security protocol developed to enhance the security of online transactions. This technology adds an extra layer of security when shopping online, requiring buyers to complete an authentication step before the transaction can be finalized.

Importance for Traders

1. Fraud Reduction: 3D Secure helps protect merchants from fraudulent chargebacks. By verifying the identity of the buyer, the risk of fraudulent transactions is significantly reduced.

2. Customer Trust: Using 3D Secure can improve customer confidence in the security of a shopping platform. This can result in increased sales and customer loyalty.

3. Regulatory Compliance: In Europe, the adoption of 3D Secure is often mandated by current regulations, notably the Payment Services Directive 2 (PSD2) which aims to improve the security of online payments.

Why is it Mandatory in Europe?

European regulations, particularly via PSD2, impose strict requirements in terms of strong customer authentication for online transactions. The aim is to make electronic payments more secure, protect consumers against fraud and ensure a digital single market. 3D Secure therefore becomes an essential element of this policy by offering a reinforced authentication mechanism that complies with regulatory requirements.

In short, for merchants in Europe, implementing 3D Secure is not only a necessity to comply with regulations but also an advantageous strategy to reduce fraud risks and build customer trust.