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What is 3D secure? How does it help online merchants?


Dispute management is one of the most jobs that an online merchant has to deal with regularly. It is highly recommended to have a chargeback prevention system in place to avoid chargebacks in the first place. As the wise saying goes, prevention is indeed better than having to fight the chargebacks later on. One of the main solutions you can consider is 3D security. Here is what it entails and some of the main benefits it offers to online merchants.

What is 3D Secure?

3D Secure adds an extra layer of verification to online transactions and is considered one of the best fraud management solutions that help online merchants to reduce chargebacks. Basically. It enables consumers to create a unique passphrase for their credit card. Which they then use to verify every transaction on that card. By adding the extra protection of a password for all online credit transactions, both the user and the online merchant are protected.

3D Secure or 3 Domain Server involves 3 main parties in the transactions.

  • The online merchant where the purchase is being made.
  • The acquiring bank (the merchant’s bank)
  • MasterCard and VISA (the card issuers)

The 3D secure risk management tool includes both MasterCard Secure Code (MSC) and Verified by VISA (VBV). It is the latest fraud management initiative that offers online companies extra protection from chargebacks. As a result, if you are an online merchant, you should also consider adding 3D secure payment on website. Here are some of the benefits that you can get:

Advantages Of Using 3D Secure?

Shifts Liability

 The main advantage to online merchants using 3D Secure is the ability to shift liability after every transaction that has been successfully verified. This helps to reduce chargebacks significantly since the risk is transferred to the card issuing bank, rather than the merchant.

Chargeback Prevention

When an online merchant complies with all the consumer’s legal requirements, which is by using a 3D secure system to authenticate the transaction, then it reduces the likelihood of fraudulent transactions. In effect, there are less disputed transactions that you have to deal with as an online merchant, which is the foundation of a good dispute management system.

Increases Consumer Confidence

3D Secure makes customers more comfortable with regards to shopping online because of the extra protection and fraud management provides by way of asking for a password to verify any transaction. This can translate to improved sales and profits for online merchants who offer this payment option.

In conclusion, if you are an online merchant with high chargeback ratios, then it is time to consider adding 3D secure payment. It has been proven to be one of the best ways to reduce chargebacks and help you keep your business running securely.

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