Conditional 3-D Secure

How does it work?

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:

• Something he knows. This can be a static password or the CVV-code.
• Something he has. This can be a one-time password that is sent to the payer’s phone or email or it can be a one-time code provided in his Google Authenticator (or similar) app.
• Something he is. This can be a fingerprint, iris scan, or Face ID.

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.

Why should I use 3-D Secure?

Reduce Risk

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.

The Liability Shift

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.

Control your Risk Exposure

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.

PSD2 Compliance

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.