Using 3DS2 for SCA compliance
Explore how 3DS2 enhances SCA compliance by reducing fraud, supporting mobile transactions, and improving user experience under PSD2.
A new standard called 3DS2 (3D Secure 2.0) is now being promoted as a solution for SCA under PSD2. 3DS stands for 3D Secure, an open standard used by major credit card brands to authenticate cardholders. 3DS can dramatically reduce fraud and increase authorization approvals and is one of the primary ways for Payment Services Providers to comply with the SCA mandate.
3DS2 requires merchants to send additional data with each transaction so that the bank can validate if the transactor is the actual cardholder. If the data matches what the bank requires, the transaction will continue as a frictionless flow and no further user input is required.
The following table describes the difference between 3DS and 3DS v2 and why it is important:
|
3DS (3DS v1) |
3DS2 (3DS v2) |
Why is it important? |
|---|---|---|
|
For payment cards only |
Also supports mobile and digital wallets |
Greater flexibility and support for mobile e-commerce. |
|
Designed for web desktop |
Streamlined for mobile interaction models/devices |
3DS2 adoption expected to be greater because it is easier to use. |
|
Higher false declines |
Modified authentication flow and reduced false declines |
Customers are more likely to abandon a transaction or use a different payment method. |
|
No merchant opt-out or exceptions |
Lower-value transactions exempted from validation, depending on the merchant's fraud rate |
Greater flexibility and alignment of the protocol to the risk of a particular transaction. |
|
10 data points captured |
Up to 150 data points captured |
The issuer can make better decisions about the validity of the transaction with more data, preventing both fraudulent transactions as well as false positives. |