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Why 3DS Matters for Fraud Prevention

What is 3DS ?

3D Secure (3DS) is a global authentication protocol that adds an extra layer of security to online card transactions. It helps verify that the person making the payment is the legitimate cardholder—usually via a one-time password (OTP), biometric check, or another form of bank-issued identity confirmation.
 
By adding this step, 3DS significantly reduces the risk of fraud and provides greater protection for both merchants and their customers.
 

Key Benefits of 3DS

 

Fraud Prevention

3DS helps prevent unauthorised card use by confirming the cardholder’s identity before a transaction is completed.
 

Reduced Chargeback Risk

When 3DS is used and authentication is successful, responsibility for fraud-related chargebacks typically shifts from the merchant to the card issuer, according to card scheme rules. This reduces the financial risk for merchants.
 

Stronger Customer Confidence

Shoppers are more likely to complete purchases when they feel their information is secure. Offering 3DS shows customers that you take security seriously.
 
Compliance and Global Best Practice
 
3DS is considered best practice for fraud prevention, and in some regions, it’s mandatory.
  • UK: Required under PSD2’s Strong Customer Authentication (SCA).
  • Australia and New Zealand: Rapidly increasing adoption, with strong support from issuers and acquirers.
  • USA: Optional but strongly encouraged, especially for higher-risk merchants or those experiencing elevated chargeback rates.
  • Global: Adoption of strong authentication is growing, making 3DS a smart investment for merchants operating in multiple markets.