In order to protect themselves from card fraud, which is more frequent in online transactions, than in retail ones, businesses need to implement special fraud protection tools. 3D Secure program is one of the special tools designed to prevent online card fraud.
3D Secure is an XML protocol, which creates another level of security when online transactions are processed. If a cardholder wants to use 3D Secure, the bank which issued the card has to be enrolled in the program. If the bank does participate in the 3D Secure program, the card owner is able to enroll the card and associate a special password with it, so that during online purchases additional authentication process takes place. If the password, associated with the card is not valid, the payment cannot be processed.
A business, wanting to participate in 3D Secure program, must integrate with the provider of a special Merchant Plug In (MPI) component, in order to be able to transfer respective values to the payment gateway. The MPI checks if the card is enrolled in 3D Secure program, and, if the “answer is positive”, it executes the redirect and sends the value to the payment gateway for authentication.
3D Secure program protects both cardholders and merchants. On one hand, thanks to 3D Secure program, it is more difficult for fraudsters to use stolen cards for unauthorized online purchases. On the other hand, as a result of rejection of transactions during 3D Secure authentication, the number of chargebacks issued after unauthorized transactions, is reduced.
Some more information on 3D secure program can be found in the respective article “3D Secure Program” on Paylosophy.