3D Secure v2: what are its advantages and opportunities?

The CB, Visa and MasterCard networks are implementing a new 3D Secure v2 program in order to make the customer journey even more fluid and reinforce the security of transactions.

The major benefits of 3D Secure v2 are:

  • More fluid and integrated customer journey, especially when it comes to mobile applications.
  • New authentication methods for cardholders.
  • Management of exemptions and frictionless (small amounts, trusted beneficiary, fraud rate monitoring, etc.).

Its deployment requires changes throughout the electronic payment chain (websites, Technical Acceptance Service Providers, data transport networks, Merchant Bank, Lead Bank). It will be phased in over 2019 and 2020.

Authentication in Pop In mode.

The principle of redirection to a non-responsive authentication page, which was a source of payment abandonment, has been reviewed. Authentication will now be done in “Pop In” mode (window that opens in the buyer’s browser).

The 3D Secure v2 redirection page introduces the feature of informing the authentication server about the size of the buyer’s screen. This allows the Pop in window to adapt to the size of the browser page, thus improving the user experience, especially on mobile devices (if the issuer’s authentication server supports the screen size settings).

Frictionless: authentication without systematic interaction with the buyer

The 3D Secure v2 protocol allows to exchange new data between the merchant and the issuer (the cardholder’s bank).

Thus, the analysis of enriched data will allow the issuer to decide:
  • Either to trigger strong authentication of the cardholder, i.e. to ask the buyer to enter supplementary details.

    Strong authentication methods are the responsibility of the card issuer and must evolve towards “biometric” solutions and/or connection to their “online bank” in order to eventually eliminate single-use codes sent by SMS (known to be not highly reliable).

  • Or to finalize the payment process without interacting with the buyer. This mechanism is called “frictionless”.

In conclusion

Objectives:
  • Transform most payments without cardholder authentication in order to facilitate the customer journey. The goal of card networks is to eventually obtain 85% of payments without cardholder authentication while maintaining the liability shift.
  • Reduce fraud and, consequently, your chargeback rates.