3-D Secure is an extra layer of security for your online shop. It authenticates the payer by confirming that the payer is the rightful owner of the card being paid with. Card schemes incorporate it into their programmes, so you may know the feature as "Visa Secure" (former Verified by Visa) or “Mastercard SecureCode”.
In a typical online card transaction, the payer is authenticated by providing a password or another code, for example, the CVV-code on his card. With 3-D Secure authentication, two or more factors are required to authenticate a person, making it more secure.
The payer has to provide two or more of the following:
This is how 3-D Secure works in most cases: When the payer reaches checkout, he enters his password/CVV-code as usual. After confirming the payment, a window will pop up. In this window, the payer will be asked for his one-time password, which is sent to him by phone, email, or can be found in his Google Authenticator app.
If he enters the correct password, the authentication is successfully completed and the payment is approved. If he enters the wrong password or does not enter a password at all, the authentication is unsuccessful and the payment will be rejected.
3-D Secure is quickly becoming a norm for online payments, but you might want to control which transactions require this method of authentication. That’s why Clearhaus offers a service called “Conditional 3-D Secure”.
It allows you to set rules for which transactions 3-D Secure should and should not be applied to. For example, you might want to only apply 3-D Secure to transactions over a certain amount or transactions that originate from a certain area.
You are welcome to contact our customer support to learn more about our Conditional 3-D Secure service or if you want the feature set-up in your online shop.
Read more about 3-D Secure here.
Using two or multiple factors to authenticate the payer reduces the risk of fraud. As a result, you will receive fewer chargebacks, which will save you money. It also helps you save time and resources on fraud detection and protection - so you can focus on growing your business.
One of the key benefits of 3-D Secure is the liability shift. If you, as an online shop owner, apply 3-D Secure to your transactions, you will not be liable for these transactions if they turn out to be fraudulent. Instead, the responsibility (and the loss) is shifted to the cardholder’s issuing bank. The liability will shift as long as you try to enable 3-D Secure on a transaction - even if 3-D Secure isn’t actually applied to the transaction - sometimes the cardholder’s bank does not support 3-D Secure and therefore it can’t be applied to the transaction.
Conditional 3-D Secure gives you control over which transactions 3-D Secure should be applied to. There are many factors that you can apply the conditional rules for, like transaction amount or customer location. For example, you might want to apply it to expensive products or transactions from an area from where you receive many chargebacks. In this way, you will let your “low-risk customers” pay as they normally do, but require “high-risk customers” to be authenticated in a more secure manner.
Another great benefit of using 3-D Secure is that it qualifies as Strong Customer Authentication, which will soon be required as part of the PSD2 legislation.
Conditional 3-D Secure is ideal for dealing with the PSD2 rules. For example, PSD2 only requires Strong Customer Authentication for transactions above 30 Euros and only on transactions within the EU. With Conditional 3-D Secure you can set up rules for this, so that 3-D Secure is only applied to this type of transactions - and not applied to transactions below 30 Euros or transactions from non-EU countries.
In order to have 3-D Secure enabled in your shop, you need both an acquirer and a payment gateway that support the feature.
Your gateway is the point of contact when it comes to 3-D Secure. Some gateways activate 3-D Secure by default, with others you have to request it. When you submit your request, your gateway will take care of the technical stuff.
Your gateway typically offers some rules for when 3-D Secure must be required. If you want different rules you should contact your gateway - you can also give us a call on +45 8282 2200, and we’ll see what we can do.
By default, Clearhaus requires 3-D Secure on all foreign transactions.