3D Secure stands for 3 Domain Secure. There are 3 parties involved in the 3D Secure process which are:
• The Vendor
• The Acquiring Bank
• Visa and MasterCard
3D Secure is a culmination of Verified by Visa (VbV) and MasterCard Secure Code (MSC). It is the latest fraud prevention initiative launched by card schemes as a more secure method for authenticating the shopper at the time of the transaction. Visa and MasterCard will take responsibility for your 3D Secure Authenticated transactions, taking the liability and reducing the risk of chargebacks. (Please double check with your merchant acquirer on any occasions you believe liability should have shifted).
Benefits and Limitations of 3D Secure Authentication
• Liability shift: The major benefit to you as the vendor is that you are likely to experience a liability shift for a fully 3D Secure authenticated transaction. Meaning if it later turns out to be fraudulent you will not be responsible. You are protected by the card issuer against such chargebacks because the bank themselves assume the liability. N.B You will need to contact your merchant bank for exact terms and conditions for a liability shift.
• No additional charges: There are no additional charges for VbV and MSC from Sage Pay. Your acquiring bank may charge you to add this to your merchant number, but you may also find that they will lower their charges to you if you support these schemes.
• Flexibility: You have the option of setting up a rule base on your Sage Pay account to automatically accept or reject transactions depending on the 3D Secure results.
• Cards that are part of the scheme: VISA, VISA DELTA, MASTERCARD, MASTERCARD DEBIT, INTERNATIONAL MAESTRO, UK MAESTRO, LASER, SOLO, and VISA ELECTRON.
• Easy to set up: You control the set up in your My Sage Pay area.
• Chargebacks can still occur: A 3D secure validated transaction does not guarantee a liability shift, as it is down to the discretion of your merchant bank. Such circumstances include the customer denying receipt of goods or the AVS/CV2 values are returning matched responses.
• Not all cards are part of the scheme: As yet there are no similar initiatives for American Express, JCB or Diner's Club integrated with Sage Pay.
Due to the limitations listed above, it is a good idea not to rely on these schemes solely, but rather to use the results as part of your overall fraud screening process.