3D Payer Authentication Solutions
January 13th, 2010 | 
Author: 3D Payer Authentication Solutions
What is 3D Secure Payer Authentication?
Payer authentication enables all parties in an ecommerce payment transaction to transmit confidential and valid payment data and provides verification to the merchant that the buyer is the authorized owner of a particular card account.
3D Secure has been named by VISA and MasterCard because there are 3 interoperability domains involved in the authentication process.
Issuer Domain
Interoperability Domain
Acquirer Domain
Also involved in the authentication process are the cardholder the merchant the payment gateway and the bank’s processor
Consumers:
Once enrolled in 3D Secure consumers can be protected from fraudulent use of their card at an Internet merchant site this builds consumer confidence in the payment mechanisms online prompting greater use and increased spending.
Merchants:
Merchants benefit from chargeback liability shift on disputed payment transactions if they are enrolled in 3D Secure and made an attempt to authenticate the cardholder during the payment process. The issuer nor the cardholder need to be enrolled in order for protection to be guaranteed!
VISA supports chargeback liability shift on 3D Secure attempts and completed authentication requests.
MasterCard in USA and Canada do not support ‘attempts’ and require full UCAF authentication in order to transfer chargeback liability shift from merchant to consumer.
MasterCard in EU SAMEA LACR and AP support CB liability shift on SecureCode ‘attempts’ on intraregional transactions cardholder and merchant in same region if the SecureCode request is attempted with or without completion and a valid payment transaction authorisation is obtained.
Potential problems with 3D Secure:
If issuers have implemented activation during shopping to facilitate enrollment for their cardholders online activation will occur while shopping at a 3D Secure enrolled merchant site. If the consumer selects to “activate now” the verification of the consumer’s ID takes place first however failed attempts to either validate the consumer’s ID or enrollment problems can cause the popup window to get “stuck” open and the consumer must exit manually or leave merchant site resulting in lost sales.
Communication Internet can be disrupted causing timeouts and browser session hanging resulting in a failed enrollment and potentially a lost sale.
Many issuers have not adequately educated their cardholders about “activation during shopping” and thus the consumer thinks the merchant is requesting information through a popup box and exits the session.
Consumers could have popup killers set on their browser to prevent the popup window from opening to initiate the process.
The Internet connection between the consumer and the merchant could be disrupted particularly dial up users during the middle of the enrollment or authentication process causing the enrollment process to fail
What are the benefits in using 3D Secure?
Merchant Benefits:
Simple set up no software to purchase no merchant “plugin” to install
Immediate access to Verified By VISA and MasterCard SecureCode once enrolled
Protection from consumer fraud losses unauthorized transactions and disputes
Chargeback liability shift for key CB reason codes even on supported attempts
Increased consumer confidence leading to increased sales
Increased card acceptance over other payment methods increased sales!
Lower transaction costs allowing for more competitive product pricing
Greater income potential from reduced transaction costs and chargeback penalty fees
MasterCard SecureCode and Verified By VISA programme benefits marketing and support
Acquirer Benefits:
Better and cheaper than chargeback insurance!
Immediate reduction in interchange costs for 3D Secure authenticated ecommerce transactions up to 40 basis points savings on 3D Secure transactions even attempted 3D Secure transactions!
Immediate reduction in credit risk disputed transactions chargebacks exception handling expenses and portfolio losses;
Immediate reduction in back office costs and administration relating to retrieval requests dispute handling chargeback investigation and lengthy presentment cases
Fast and easy enrollment no MPI software to purchase installation and certification are completed on the bank’s behalf;
Reduced capital expenditure in relation to other fraud management and detection services/software;
Guaranteed liability shift from Acquirer to Issuer for key chargeback reason codes.
Processor and Aggregator Benefits:
Long term retention of 3D Secure compliant merchants with Acquiring banks;
Immediate reduction in disputed transactions chargebacks exception handling fees and portfolio losses;
Immediate reduction in penalty fees and fines associated with high chargeback merchants gt;1;
More negotiable discount rates for 3D Secure authenticated ecommerce transactions immediate savings across the acquiring business portfolio;
Fast and easy enrolment no MPI software to purchase installation and certification are completed on your behalf by FAC!
Processor and Aggregator Benefits:
“Pay as you Go” enrolment model register one some or all of your entire portfolio!
Acquirers can decide which merchants to set up for 3D Secure
Reduction/elimination of high risk merchants from the Global Chargeback Monitoring Programmes;
Overall improvement in merchant portfolio and profitability
About the writer:nbsp;nbsp;FAC’s 3D Secure Service cGate SecureVerifyFirst Atlantic Commerce licensed MPI source software from a certified vendor in the UK CardTech LimitedFirst Atlantic Commerce installed the MPI so that 3D Secure could be provided to merchants whether they use FAC’s payment gateway services or not;First Atlantic Commerce is the first certified ‘service provider’ of 3D Secure solutions in the LACR
Related posts:
Posted in e-commerce