3D secure payment authentication market: A step towards preventing online fraud

For extra fraud protection, 3D secure requires customers to finish an additional verification step with the card issuer when paying. Usually, the customer is directed to an authentication page on their bank's website, and they enter a password linked with the card or a code sent to their phone. In the 3D secure payment authentication market, the process is familiar to the customers through the card network's bank names, such as Visa Secure and MasterCard Identity Check.

Global 3D secure payment authentication market size & share was valued at USD 1.12 Billion in 2022 and is expected to reach USD 3.49 Billion By 2032, growing at a CAGR of 12.0% during the forecast period, according to? Polaris Market Research & Consulting, Inc.

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How does 3D secure function?

The 3D secure protocol provides a supplementary level of payment protection to an online transaction. So to complete an online purchase, the cardholder is asked to offer proof of identity by entering a unique password, an SMS code, or a temporary PIN. Some initial steps involved in the 3D secure process are card information collection, 3D secure enrolment confirmation, redirection to the provider's 3D secure page, additional security authentication, redirection to the merchant's website, and payment confirmation.

The benefits of 3D secure

The payment liability shift is another bonus of 3D security for online merchants. By completing an additional authentication step through 3D secure, an issuing bank becomes liable for fraudulent chargebacks. In the 3D secure payment authentication market, even if the customer claims they have an unauthorized payment from them in the card, the majority of the time, the card provider will be liable for managing the refunds. Fewer chargebacks also indicate more money in the pocket. 3D secure helps mitigate the resources linked with dispute management, chargeback penalties, and fees.

Drawbacks of 3D secure

While the 3D secure protocol is one of the most effective payment fraud prevention methods, it is often associated with higher cart abandonment rates. The longer the checkout process is, the more likely the customer will abandon their carts altogether. Adding yet another authentication step for them to complete often hurts both conversion rates and the holistic shopping experience.

Expansion of the market in North America

The growth of the regional market can be attributed to a significant increase in the adoption of these solutions amongst several banks and financial services-related companies with the surge in the number of online transactions due to the emergence of shopping through various online channels to circumvent Card Not Present fraud primarily in countries such as the United States and Canada.

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Key players

Some major players operating in the global market include GPayments Pty, Broadcom Inc., Mastercard, Visa Inc., Bluefin Payment, American Express, RSA Security, Decta, Modirum, Marqeta, Cardknox Development, Discover Financial Services, ENTERSEKT, and Finserv.

Final thoughts

As e-commerce continues to evolve, so does 3D secure technology. Lately introduced 3D secure 2.0 protocol is a substantial lead forward in online payments. In the 3D secure payment authentication market, not only does the technology offers smoother shopping experiences, but it also takes online payment security to a whole different level. Online payments are becoming the go-to method, and such security updates are inevitable. The particular security standards make the internet more secure, minimize online fraud and assist both customers and marketers in feeling safer.?