Online Payment Terminology: 3D Secure

3D Secure authentication is an additional fraud prevention method that is available with HyperPay‘s payment service to process transactions.
It allows online shoppers to create a password to their card that is then verified whenever a transaction is processed through a site that supports this authentication. The addition of password protection allows extra security on transactions that are processed online.

3D Secure is an XML-based protocol designed to be an additional security layer for online credit and debit card transactions.

The basic concept of the protocol is to tie the financial authorization process with an online authentication. This authentication is based on a three-domain model (hence the 3-D in the name).

The three domains are:

  • Acquirer Domain (the merchant and the bank to which money is being paid).
  • Issuer Domain (the bank which issued the card being used).
  • Interoperability Domain (the infrastructure provided by the card scheme, credit, debit, prepaid or other type of finance card, to support the 3-D Secure protocol). Interoperability Domain includes the Internet, MPI, ACS and other software providers

The protocol uses XML messages sent over SSL connections with client authentication (this ensures the authenticity of both peers, the server and the client, using digital certificates).

The advantage for merchants is the reduction of “unauthorized transaction” chargebacks. And when using a payment provider that’s offers 3D Secure option you won’t have to purchase MPI to connect to the Visa or MasterCard Directory Server. This is expensive [clarification needed] (setup fee, monthly fee and per-transaction fee) will be covered from your payment provider.

As 3D Secure is controlled by VISA and MasterCard the following cards can be used: VISA, VISA DELTA, MASTERCARD, MASTERCARD DEBIT, INTERNATIONAL MAESTRO, UK MAESTRO, LASER, and VISA ELECTRON.

The down side of 3D Secure:
Online Shoppers don’t fully understand it. In markets where it’s not mandated, customers are not always sure what to do. When faced with an extra step in the checkout process – many will just give up and seek out a seller that doesn’t use it.

Card blocking. Livid customers who have been locked out of online shopping will increase the number of complaint calls to your customer service line. They may also vow to never transact with you in the future. -quoted

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