Authentication, also known as 3D Secure 2 (3DS2), is a crucial part of online card payments. It verifies the shopper's identity to prevent fraud and protect your business. 3DS2 offers both challenge and frictionless authentication flows.
How 3DS2 works
Challenge Flow: The cardholder actively confirms their identity, usually with a one-time password (OTP) sent via SMS or a banking app.
Frictionless Flow: The transaction is automatically approved without any action from the cardholder. This happens when the issuer assesses the transaction as low risk based on factors like the shopper's history and purchase amount.
The specific authentication method used depends on the card issuer's risk assessment and the shopper's device and browser capabilities.
Authentication is enabled by default, to accept unauthenticated transactions, reach out to our customer support team. We will do a risk based analysis and make a decision on disabling authentication on your account.
Authentication Methods
Shoppers may authenticate in a few ways:
One-time password: Sent via SMS or generated by a banking app.
Banking app: The shopper might be redirected to their banking app to approve the transaction.
Out-of-band authentication: The shopper receives a notification from their banking app to confirm the payment.
Important Notes
Authentication pages are hosted by the issuing banks. Neither you nor we control these pages or their functionality.
If a shopper experiences issues with the authentication page, advise them to contact their bank directly. We track authentication initiation and page loading, but cannot resolve issues within the bank's system.
Liability shift
In the context of card payments, liability shift refers to the transfer of responsibility for fraudulent transactions from you to the card issuer. This typically occurs when you have successfully authenticated a transaction using a method approved by the card network (such as 3D Secure 2.0).
Without Liability Shift: When a fraudulent transaction occurs and you do not utilize 3DS authentication, you are typically held liable for the chargeback and associated costs.
With Liability Shift: When you utilize the appropriate authentication protocols and a fraudulent transaction still takes place, the liability for the chargeback shifts to the card issuer. This protects the merchant from financial loss.
Implementing strong authentication measures is crucial for you to reduce your risk of fraud and benefit from liability shift protection.
Benefits of 3DS2
Implementing 3DS2 authentication is essential to:
Reduce fraud risk
Shift liability for chargebacks to the issuer
Improve customer trust and confidence