#3DS is a standard that was introduced in the payment industry in 2001 as a step to mitigate #ecommerce #fraud. The approach was somehow clunky, with:
⬇️ a redirect to a web browser or pop up that looked not short of fraudulent😁,
⬇️ a poor mobile #ux, adding terrible #friction,
⬇️ a catch-all approach prompting the authentication on 🄰🄻🄻 ecommerce transactions,
⬇️ which inevitably led to an increase in #shopping #cartabandonment.
The latest version of 3D Secure, commonly referred as 3DS v2, was introduced in late 2019 to address new demands and some of the frictions that v1 caused. V2 gave room to:
✅ dynamic authentication,
✅ stronger security at the checkout
✅ the flow of richer data capture within the chain
✅ a risk-based authentication approach
✅ dynamic waivers controlled by the merchant, the acquirer and or the issuer
With 3DS2, #merchants have the ability to send far more data to the issuing bank than with 3DS1. With the extra #data, issuers can then apply #frictionless authentication to approve a transaction without requiring any manual input from the cardholder for low-risk transactions or trusted party [Transaction Risk Analysis referred as #TRA]
A 2021 report on #authentication from Ravelin Technology, outlined that:
💡The US were the quickest to rollout #3DS2 multi-factor authentication protocols
💡68% of transactions in the US use 3DS2, with a significant 99% authentication success rate.
💡Globally, an average of 16% of payments use 3DS2, with an average authentication rate of 55%.
💡Europe has the highest authentication rate at 99%, however with only 13% of the transactions using 3DS2.
A couple of key notions that took off with 3DS2 are:
📌Delegated authentication, whereby the issuers can allow for a third-party to do the authentication i.e. the merchant, an acquirer or a digital wallet provider.
📌Decoupled Authentication, whereby a merchant can verify the customer’s identity and authenticate the transaction through a different channel, such as a mobile #pushnotification inside the customer banking app or by email or through any other channel the issuer bank opts for to request the #payment consent from.
👉🏽𝙋𝙖𝙮𝙢𝙚𝙣𝙩𝙨 𝙚𝙭𝙥𝙚𝙧𝙩𝙨, 𝙨𝙝𝙖𝙧𝙚 𝙮𝙤𝙪𝙧 𝙞𝙣𝙨𝙞𝙜𝙝𝙩𝙨🎤
—–
𝙇𝙞𝙠𝙚 𝙩𝙝𝙞𝙨 𝙘𝙤𝙣𝙩𝙚𝙣𝙩?
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