What you need to know about the 3D Secure payment gateway

3D Secure payment gateway may be the answer to security challenges your business might have around card-not-present and e-commerce transactions.

A breach of your customers’ data can spell trouble for your business. Fraudsters are continually hacking payment systems to obtain consumer data, from large enterprises to small-scale online stores. These include customer debit/credit card details, banking information, addresses, and other sensitive information that are stored in payment gateways. This information in the wrong hands can cause harm to your customers and your brand.

3D Secure Payment Gateway helps in combating such frauds by adding an extra layer of security to online transactions. In this article, we will go over what a 3D secure payment gateway is, and how it works when a customer makes a transaction online. We will also discuss the benefits and challenges it brings.

What is a 3D Secure payment gateway?

For a merchant, it is far easier and more convenient to take debit and credit card payments online. Even customers prefer to use their cards for making payments. However, there are some risks associated with taking card payments online. Fraudsters are always looking for avenues for making unauthorized transactions.

3D Secure stands for 3 Domain Secure. It is a new way of processing e-commerce transactions, which provides an additional security layer to protect you from fraud.

A 3D Secure payment gateway allows merchants to receive payments from customers through a debit or credit card. The customers who are making the payment are required to enter the one-time password which has been sent to them, in order to complete the transaction.

3D secure payment gateways add an extra layer of security for online transactions by verifying the identity of a customer and allowing only the authorized user to make a transaction.

The entire procedure for 3D payments is based on three domains (3D) of security protocol, each involving three parties:

• The acquiring bank is also known as the acquirer domain.
• The issuing bank is also known as the issuer domain.
• Interoperability domain – the payment infrastructure that processes the transaction.

How 3D Secure payments work

When a customer attempts to make an online purchase, the merchant will redirect them to the website of their card issuer to authenticate the transaction. This is where you will be asked to enter your 3D Secure password or PIN.

To verify the customer using 3D Secure, the customer’s bank requests a one-time password (OTP) from an enrolled mobile number. The customer needs to enter this OTP to get authentication from their card issuing bank.

The essential steps in a SeerBit 3D transaction include the following:

1. The buyer selects a product and adds it to their shopping basket.
2. The customer proceeds to the checkout by clicking the relevant button on the merchant’s website.
3. The website redirects to the SeerBit Checkout page, where the customer must provide payment details.
4. A one-time password (OTP) is delivered to the customer’s phone, which must be entered to complete the transaction.
5. The merchant sends the order over to the SeerBit 3D secure payment channel.
6. The transaction is securely sent to the processor using the Seebit payment platform.
7. The processor examines and confirms the transaction before routing it to the card issuer (Mastercard, Visa, etc).
8. The card issuer examines the transaction data and sends it to the customer’s bank (issuing bank), for approval.
9. The card issuer and processor, as well as the SeerBit payment gateway, receive approval or denial.
10. The merchant gets a transaction approved notification and the funds are debited from the buyer’s bank account and sent to the merchant’s account.

2D vs 3D Secure payment gateway

Payment gateways come in different forms. Both 2D and 3D payment gateways can be used by merchants on their websites or mobile apps as platforms for accepting online payments.

A 2D payment gateway offers online buyers a checkout feature that enables them to enter their basic card information or credentials. Customers must then provide a set security code provided by the card issuers or issuing banks (the CVV), after which payment is made immediately and funds are debited from the customer’s bank account.

For 2D transactions, the sum would be withdrawn from the customer’s bank account with no extra security authentication once the cardholder enters the card data and proceeds.

By contrast in a 3D transaction, the amount is debited from the cardholder’s bank account, only after the person making the payment has entered a password and OTP sent to them by their bank. This ensures security and safety.

Benefits of 3D Secure

Here are 3 key benefits of 3D Secure payments

1. Reduced risk of fraud for both merchants and customers

The 3D Secure payment process is designed to allow customers to use a password to identify themselves with the card issuer, and this helps to eliminate fraudulent transactions.

The main benefit of the 3D Secure payment gateway is that it protects online buyers every time they shop. They have complete control over their internet purchases and may confirm them immediately. Customers receive OTP on their mobile devices whenever a questionable payment occurs. Online customers are protected from cybercrime attacks by reporting fraudulent transactions and not supplying OTP.

2. More sales for online businesses

3D Secure makes online shopping safer for consumers and provides them with added peace of mind when shopping online. The added security gives consumers greater confidence when making purchases or payments on the internet, reducing the number of abandoned shopping carts and increasing revenue for the merchant.

3. Lower cases of chargebacks for merchants

Chargebacks are complaints that a cardholder files against a merchant when they don’t recognize a transaction on their bank account or believe they didn’t obtain there are the 3 main ones.

1. Some buyers may view this extra step in the purchasing process as an impediment; having another step to complete may turn a buyer away.

2. Customers who are unaware of the 3D Secure payment option may believe that there is a problem with their purchase and discontinue it.

3. Certain customers may have installed pop-up blockers, which can prohibit them from completing a transaction.

Conclusion

3D Secure payment gateway is an excellent payment method for online businesses. When implemented properly, it helps reduce risks for banks and merchants and offers more security to consumers. 3D secure is a popular way to pay online and is growing in popularity. Use this article as a primer on how it works and where it will benefit your business.

SeerBit offers seamless 3D Secure payment gateway integrations that will keep your customers’ transactions safe and have you smiling to the bank. Click here to get started.