3D Secure

3D Secure (3DS) is a customer authentication solution used to prevent fraud during card-not-present transactions. 3DS stands for 3 Domain Server because it operates in a three domain model:

  • Acquirer domain: The environment of the merchant and acquirer that receives the payment
  • Issuer domain: The environment of the issuing bank that funds the payment
  • Interoperability domain: The system that supports the 3DS technology and allows the parties to transact

In short, 3DS is a technology implementation that adds an additional step in the checkout process by asking customers to provide a password, SMS code, or temporary PIN before authentication. It provides maximum security by digitally confirming the identity of all three parties.

In some markets, 3DS is an optional, additional security protocol you can add to your payments stack; in others—such as the European Union—it's a regulatory obligation all businesses must comply with.

How 3DS Can Impact Your Business

Processing transactions with 3DS provides your business with increased security, thus reducing instances of fraud and chargebacks and saving your business money. However, the additional time customers spend at checkout is associated with an increased rate of card abandonment and lower turnover. Not only that, but the inherent friction of 3DS verification can cause customer experience problems—such as longer queues and more complications—which may translate to increased customer service expenses for your business.

Observing 3DS Trends In Your Data with Pagos

Peacock by Pagos, our data visualization product, includes a full 3D Secure Dashboard. In this dashboard, you can view a breakdown of all attempted, approved, and declined 3DS transactions, including the distribution of those that were customer-initiated vs merchant-initiated. You can even explore the breakdown of declined 3DS transactions by their assigned decline code, and that of attempted transactions by their 3DS authentication result.

A key component of this dashboard is that you can track these data points over time. This is especially important because 3DS is a substantial technical integration for which the technical specs change regularly. By monitoring 3DS authentication results over time, you can quickly identify when a technical error or outdated spec in your integration suddenly throws more declines than usual.