Boston, March 26, 2013 – A new report from Aite Group analyzes the renewed market acceptance of 3-D Secure. Based on Aite Group interviews with a cross-section of North American payments-industry stakeholders, the report provides an overview of current fraud challenges facing e-commerce merchants and explores issuer, merchant, and payment gateway sentiment surrounding the new and improved 3DS.
In the ongoing battle of fraud, the bad guys continue to escalate warfare with an intensifying barrage of ever-evolving attacks. But merchants can reduce risk in a number of ways without completely derailing the customer experience, and one of the more interesting solutions is the latest incarnation of 3-D Secure. Once akin to a four-letter word in many merchant circles, 3DS has seen marked improvements in the 14 years since its inception--improvements that have converted it from a cumbersome, confusing service into one that merchants are willing and even eager to engage with. The service enjoys widespread acceptance outside the United States, and a number of countries now mandate 3DS for some portion of online transactions.
“In addition to adding a layer of security to the transaction, merchants using 3-D Secure benefit from a lower interchange rate in most markets and a shift of fraud liability back to issuers,” says Julie Conroy, research director with Aite Group and co-author of this report. “Merchants appear willing to give 3-D Secure another try, particularly as card-not-present fraud rates are poised to escalate sharply with the U.S. migration to EMV.”
This 21-page Impact Note contains six figures and four tables. Clients of Aite Group’s Fraud & AML service can download the report.