If you are an e-commerce merchant who hasn’t heard of 3D Secure (or, let alone, an e-commerce merchant who just doesn’t want to hear about 3D Secure again), you need to read this. Controversial, but true. And by “need,” I mean NEED. Why? Because…
1) Using the term fraud protection for fraud prevention tools is misleading. Anti-fraud tools (don’t get me wrong, there are plenty of good ones out there) are designed to run transaction details through their software, that then “flags” transactions with a high probability of being fraudulent.
The implications of this are twofold:
- When transactions that don’t get flagged by the fraud software are, in fact, fraudulent, the merchant still needs to pay for the chargeback.
- When transactions that do get flagged by the fraud software are, in fact, not fraudulent, they still get declined. And as if your revenue model wasn’t struggling enough, this causes the unwelcome concept of “false declines” that leads to additional lost revenue, for no reason. Do you really want that?
On the contrary, 3D Secure is a true fraud protection tool. When using 3D Secure, all transactions get accepted, causing no false declines. If a transaction is disputed, liability shifts to the card issuer, meaning that the merchant is no longer liable for the chargeback. Best of both worlds much?
2) “3D Secure is a clunky customer experience that causes cart abandonment” is an outdated myth. And it’s about time it got debunked.
Correction: “3D Secure used to be a clunky customer experience that caused cart abandonment, but this is not the case anymore.”
In the old days, to get 3D Secure protection on transactions, the protocol required consumer friction at checkout: When reaching the payment form and after entering all the necessary details, a user was prompted to answer an additional security step. However, this is no longer the case. Transactions now get 3D Secure protection without having any impact on the consumer experience, as they get authenticated on the backend, via 3D Secure’s software. So this year, put your misconceptions aside and give your e-commerce store a real chance of fighting online fraud costs.
3) Criminal fraud is only half the reason chargebacks occur, with friendly fraud being the other, equally important, but often neglected half. And with friendly fraud causing chargebacks because transactions are being disputed by the actual purchasers themselves, fraud prevention tools (unless they have predictive capacity for human behavior), will not “flag” these transactions. The result? When friendly fraud chargebacks occur, the merchants take the fall. You know where this is going… 3D Secure is the only technology that can be used to alleviate merchants from friendly fraud chargebacks, since, even if they do occur, liability shifts to the card issuers. Peace. Of. Mind.
4) After all, 3D Secure is the only program that was developed and backed by the card networks (Visa, Mastercard, American Express, Discover). And, at the end of the day, if you can use an anti-fraud tool that is created by the card brands themselves, why use anything else?
5) Online fraud is dangerously on the rise, with no plan of stopping anytime soon. You hear the horror stories, you read it in publications, you see it in the e-commerce community, and some of you might have also experienced it first-hand. Maybe this means that 2017 should be the year that you act.