3D-Secure (3DS) adds an extra layer of security when making purchases online. You might have seen it branded as “Visa Secure”, “Mastercard SecureCode”, “American Express SafeKey”, or a similar name depending on your card issuer.
3DS1 was the first version, introduced in 1999 when desktops were the main way people bought things online. It required customers to set and remember a password that they had to enter to complete a purchase online. The process usually meant customers were redirected away from checkout to enter their password before being redirected back again if successful.
Since then, all major networks have deprecated 3DS1 in favor of 3DS2. The first version of 3DS led to higher rates of checkout abandonment, as people struggled to remember their passwords. What’s more, customers didn’t trust that the checkout process involved multiple redirects or popups, and it didn’t work well with mobile devices.
3DS2 introduces smarter authentication challenges and a better checkout experience for customers in the smartphone age. Rather than remembering a password, customers can authenticate using a code sent by SMS or using their online banking app. Security challenges can be embedded directly into the checkout, making for a seamless experience with fewer redirects. It also introduced frictionless authentication, where some kinds of purchases can go through without a 3DS challenge at all.
By making it easy for customers to authenticate, 3DS2 results in fewer abandoned checkouts – a win for sellers. At the same time, it reduces the risk of fraudulent transactions, resulting in fewer chargebacks.
What do I have to do?
3DS2 is now the only version of 3DS that customers see online. You don’t have to do anything to turn it on – Paddle fully supports 3DS2 out-of-the-box. We take care of the entire process and all the compliance so that you can focus on more important things.