What is 3DS2? How Would it Help Merchants in The Caribbean?

Let’s discuss what 3DS2 is & how it can be helpful for your business. 

What is 3DS2? 

3DS2 (3D Secure 2.0) is a security protocol used on credit and debit cards. It’s an expansion of the original fraud prevention system for credit card transactions. 3DS2 has become a standard for all major credit cards throughout the world. 

As a modernized version of the original 3DS1, 3DS2 provides a frictionless user experience with authentication procedures for all card-not-present transactions online. In 2016, a multinational technology organization that facilitates payments developed 3DS2 as a replacement for 3DS1. 

What are the Benefits of 3DS2? 

1. Reduced friction and a faster checkout process 

There’s a great deal to be gained from 3DS2. It lets customers authenticate themselves without having to worry about being challenged. Risk-based authentication determines the risk associated with the transaction and only involves the customer for verification if it’s not low enough. Otherwise, the customer gets the best checkout experience. 

2. Embedded authentication process without redirects 

One of the biggest differences between 3DS1 and 3DS2 is that the latter is created in the mobile world, where digital payment preferences keep evolving. You can now verify online transactions with your banking app or with biometrics. 

3.Reduced shopping cart abandonment 

By providing a better user experience, merchants can reduce cart abandonment rates while improving data flow, which makes it easier for them to make better decisions regarding transactions. Consequently, consumers should feel more confident about shopping online in e-commerce environments. 

4.Reduced fraud 

With 3D Secure 2, merchants can accept credit card payments only from legitimate customers. This extra layer of security helps them reduce fraud. If the customer’s card number or other details are used fraudulently, a fraudster is less likely to get access to the customer’s 3DS pin or OTP (one time password) as well, reducing fraud risk. 

What is Being Done to Get Merchants on Board with 3DS2? 

Whether consumers are using desktop computers, mobile devices, or tablets, 3D Secure 2 offers consistent online payment experiences. Merchants can increase their profitability with the changes in 3D Secure 2. Some of the benefits include: 

  • Having access to hundreds of key data points allows issuers to authorize legitimate transactions and reduce false declines. 
  • With fewer unnecessary challenge screens disrupting the user’s journey, the user is much more likely to pay for the goods they want without abandoning them. For instance, Visa claims that the abandonment rate in UK transactions has decreased by 70% since it introduced a risk-based approach. 

How will this Affect Merchants in the Caribbean? 

A successful e-commerce business depends on safe online payments. As a result of the European Payment Directive PSD2, new card and user authentication methods have become more important than ever for further improving security. 

It’s not uncommon for merchants to worry about the changes that these changes may bring. However, at First Atlantic Commerce — having integration of 3DS2—we are here to facilitate seamless transactions so you can focus on other crucial aspects of the business.