EMV® 3-D Secure risk-based authentication

Today, only 12% of retail sales are online. With e- and m-commerce set for significant growth in the coming years, an increasing proportion of credit card purchases and digital wallets are migrating to card-not-present (CNP) channels.

While this represents a huge opportunity for players in the payment industry to develop online payment and authentication solutions, fraudsters are also following the trend towards CNP channels.

This presents a challenge for banks, merchants, and domestic and global payment schemes to provide shoppers with a buying experience that balances fraud prevention with a simple and rich customer experience.

The Three Domain Secure (3-D Secure) authentication protocol was introduced by international payment schemes to address the need for strong cardholder identity verification when making CNP transactions.

Studies have found that a “long and complicated process” during check-out is one of the major reasons for shoppers to abandon online carts. With more and more channels providing a platform for e-commerce transactions, such as PCs, smartphones and tablets, there is a clear market requirement to ensure the solution aligns with the latest customer journeys.

Following the need for strong customer authentication and a frictionless checkout experience, version 2.0 of EMV^® 3-D Secure was introduced by EMVCo with a certification program to support 4 types of service providers:

• Access Control Server
• 3DS Server (previously named merchant plug-in or merchant integrator by payment schemes)
• Directory Server
• 3DS SDK (the Software Development Kit running on the consumer device)

This protocol enables a risk-based authentication methodology across multiple channels to improve the user experience while reducing risk of fraud.

EMV^® is a registered trademark in the U.S. and other countries, and is an unregistered trademark in other countries, owned by EMVCo.