What are the Pros and Cons of 3D Secure Service

By Paul Liu
Monday, June 9th, 2014

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3D Secure is a service designed to make online transactions more secure. The service was initially launched by Visa with the name “Verified by Visa” and it was soon adapted by other service providers including MasterCard (MasterCard SecureCode), American Express (American Express SafeKey) and JCB International (J/Secure). The service works by adding an extra layer of authentication for online purchases and makes it mandatory for the customers to enter a secret PIN value to complete their transactions. The service is popular in many European and Asian countries but it is yet to become mainstream in Americas. In this article, we will discuss the Pros and Cons of 3D Secure service.

Pros of Using 3D Secure

1) Less chances of fraudulent transactions – Since 3D Secure adds an extra layer of security for online transactions, the number of fraudulent transactions go down substantially. Even if someone loses his debit/credit card, it cannot be used by others (including criminals) to make a purchase online since they won’t be able to supply the PIN value associated with the card.

2) Less number of disputed transactions – For banks and merchants, 3D Secure provides the added benefit of having to deal with far less number of disputed and reversed transactions. Since most disputed transactions are related to loss or theft of credit cards, 3D Secure allows merchants and banks to conduct their businesses with dealing with fewer headaches and paperwork.

3) Boost customer confidence and online sales – 3D Secure provides almost unbreachable level of security to online shoppers which results in increased customer confidence and boost in online sales. As far as merchants are concerned, the service allows them to expand their operations online while keeping their physical presence to a minimum.

4) Ease of integration – The 3D Secure service is easy to integrate with merchant websites. Even if a merchant website has an old CMS or shopping system, the service is easy to plug into the existing system through a simple software plugin. For customers, 3D Secure makes no difference as far as interaction with the merchant’s site is concerned since the service is triggered only after the customer enters his credit/debit card details.

Cons of Using 3D Secure

1) Confusion with phishing attacks – While 3D Secure was designed to combat fraudulent transactions, it itself could be confused with a phishing attack. Since the service opens a new pop-up window and asks for the PIN number, customers are likely to associate it with a phishing attack. To combat this, the payment processors are now trying to incorporate the 3D Secure service within the same window through frames so that there is a less chance of confusion among customers.

2) Inaccessibility – 3D Secure restricts users from making a purchase if they have not already generated a PIN number and are unable to receive the PIN number on their mobile phone for some reason. This could pose a serious challenge to tourists and expats traveling abroad since they won’t be able to buy something online without activating international roaming ( or generating a PIN number before the start of the trip).

3) Geographical restrictions – 3D Secure also differentiates between local and international transactions. While it offers protection from purchased made on domestic websites, it cannot protect customers from fraudulent international transactions.

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