3D Secure or 3DS is a protocol designed as another layer of security for online credit and debit card transactions (also known as CNP – cardholder not present). Visa developed it with the intention of improving the security of Internet payments. Visa company offered it to customers as the Verified by Visa (vbv) service. MasterCard also adopted services based on this protocol, under the name MasterCard SecureCode. JCB International did the same with J/Secure.
3D secure brings trust gained via additional security layer
The 3D secure standard creates a ‘trust-chain’ between the merchant and the issuing bank. Thanks to this standard, under specific conditions, the issuing bank takes the charge-back liability from the merchant. This standard is very simple to use for the end-user (customer/consumer).
Prior to accepting the payment, 3D secure redirects the cardholder to a third-party website, where he/she needs to input a code or passphrase, which knows only he/she. If the authentication is successful (code is correct), the association gives the payment processor or gateway (such as Areto Systems) permission to go ahead to accept the payment. Certain information is also attached to the transaction which supports a shift in charge-back liability if conditions are met. It is important to note that 3D Secure or 3DS is not a standard service and merchants would require specific registration. End-users are also not “enabled” by default – the issuing bank must be able to support this protocol.
It is also important to note that 3Secure service is mandatory for any merchants accepting Maestro debit card (issued by Mastercard) since 2007. Failure to abide by this regulation might result in hefty fines on merchants. And in worse case scenarios might also result in the inability to accept online MasterCard payments. 3D Secure adds an authentication step for online payments. People should differentiate between 3D Secure 3DS and the Card Security Code. It can be a bit confusing. The Card Security Code is a short numeric code on the back of the card.