3D vs 2D security for card payments: why are 3D secure transactions better

3D security, also known as 3-D Secure, is a security protocol that was developed to provide an additional layer of protection for online credit card transactions. It is designed to prevent fraud and chargebacks by verifying the identity of the cardholder before a transaction is approved. In contrast, 2D security, or 2-D Secure, only verifies the cardholder’s identity after a transaction has been completed. This allows fraudsters to use a card for purchases only by knowing the card number details, without ever requiring a verification from the card owner.

According to a study by the European Central Bank, the implementation of 3D Secure reduced fraud rates by up to 70%. This is a significant reduction in the risk of fraud for merchants who implement 3D Secure.

In addition to reducing the risk of fraud, 3D Secure also helps to reduce the risk of chargebacks. Chargebacks occur when a customer disputes a transaction and requests a refund from the merchant. According to a report by Juniper Research, chargebacks can cost merchants up to $2 billion annually. With 3D Secure, the cardholder’s identity is verified before the transaction is approved, which reduces the risk of chargebacks resulting from fraudulent transactions.

Another advantage of 3D security is that it provides merchants with greater control over the transaction process. In 2D security, the merchant is responsible for detecting and preventing fraud, whereas with 3D security, the liability for fraud is shared between the merchant and the card issuer. This means that merchants can have greater confidence that their transactions are secure, and that they will not be held liable for fraudulent activity.
In addition, 3D security also helps to improve the customer experience. With 3D security, customers are prompted to enter a one-time password or a fingerprint, which not only adds an extra layer of security, but also makes the transaction process more seamless and straightforward. This can lead to increased customer satisfaction and loyalty.

Finally, 3D security also helps to improve the overall security of the online payment ecosystem. With more and more transactions being conducted online, the risk of fraud is increasing. By implementing 3D security, merchants can help to reduce this risk and ensure that their transactions are secure.
In conclusion, 3D security is a much better option for merchants as it provides an additional layer of protection for online credit card transactions, reduces the risk of fraud, chargebacks and improves the customer experience. By implementing 3D Secure, merchants can significantly reduce the risk of fraud and chargebacks and improve the customer experience, ultimately leading to increased revenue and customer loyalty.

European Central Bank. (2019). Payment and security in e-commerce. Retrieved from https://www.ecb.europa.eu/paym/retpaym/shared/pdf/ECB_Payment_and_security_in_e-commerce.pdf
Juniper Research. (2019). The cost of chargebacks to merchants. Retrieved from https://www.juniperresearch.com/press/press-releases/the-cost-of-chargebacks-to-merchants-could-reach-2bn-annually

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