EMV® 3-D Secure risk-based authentication
enabling frictionless online retail
Increasing card-non-present purchase
Today, only 12% of retail sales are online. With e- and m-commerce set for significant growth in the coming years, an increasing proportion of credit card purchases and digital wallets are migrating to card-not-present (CNP) channels.
While this represents a huge opportunity for players in the payment industry to develop online payment and authentication solutions , fraudsters are also following the trend towards CNP channels.
This presents a challenge for banks, merchants, and domestic and global payment schemes to provide shoppers with a buying experience that balances fraud prevention with a simple and rich customer experience.
Enhanced EMV® 3-D Secure
The Three Domain Secure (3-D Secure) authentication protocol was introduced by international payment schemes to address the need for strong cardholder identity verification when making CNP transactions.
Studies have found that a “long and complicated process” during check-out is one of the major reasons for shoppers to abandon online carts. With more and more channels providing a platform for e-commerce transactions, such as PCs, smartphones and tablets, there is a clear market requirement to ensure the solution aligns with the latest customer journeys.
Following the need for strong customer authentication and a frictionless checkout experience, version 2.0 of EMV® 3-D Secure was introduced by EMVCo with a certification program to support 4 types of service providers:
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Access Control Server
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3DS Server (previously named merchant plug-in or merchant integrator by payment schemes)
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Directory Server
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3DS SDK (the Software Development Kit running on the consumer device)
This protocol enables a risk-based authentication methodology across multiple channels to improve the user experience while reducing risk of fraud.
EMV® is a registered trademark in the U.S. and other countries, and is an unregistered trademark in other countries, owned by EMVCo.
3-D Secure authentication protocol addresses the need of identity verification of the cardholders at card-non-present mode.