3D Secure 2.0: An Outlook on Merchant Adoption

Nov 13, 2017 | by Heidi Bleau

With holiday shopping season upon us, it serves as a good time to review the new features and benefits within EMVCo’s 3D Secure 2.0 protocol.  While revenue generation will be top of mind through the end of the year, it is expected that there will be a strong uptake of 3D Secure in 2018.

This prediction is more than a hunch, though.  RSA recently commissioned research to learn more about 3D Secure adoption rates among the merchant community.  The goal of the survey was to gauge current usage of 3D Secure, awareness of the benefits and features in the latest protocol, and to predict uptake over the next one to three years. Here are some of the highlights:

·        Three-quarters (76%) of the merchants surveyed currently use 3DS and more than half of the respondents plan to adopt 3DS 2.0.

Of those businesses planning to adopt 3D Secure 2.0, 84% will do so in the coming year, with 33% already set to go. Not surprising, there is a high correlation between current use of 3D Secure and the likelihood of adopting the latest protocol. These companies are more familiar with the benefits and potential of the more powerful, data-rich version provided by 3D Secure 2.0, so as to deliver even better fraud protection to their customers.

·        For non-users, customer experience is the main roadblock to adoption (55%).

These concerns, however, may be unfounded, as most current users report a good customer experience (87%), alongside reduced fraud (82%) and reduced cart abandonment (71%). While early implementations of 3D Secure did little to enhance the customer journey, most solution providers have generally made improvements that overcome many of the limitations inherent in the existing protocol. When non-users see that these limitations are all but eliminated with 3D Secure 2.0, we expect more e-commerce businesses to adopt it for the first time.

·        There remains a lack of awareness, even among current adopters, regarding the enhanced features delivered by 3D Secure 2.0.

Existing 3D Secure merchants are three times more likely, in most cases, than non-users to be familiar with the benefits of the enhanced features in the latest protocol.  Yet, there still remains much room for education for both users and non-users.  Even as it pertains to chargebacks for fraudulent transactions, for example, only 56% of current users and 21% of non-users cite being “very” or “extremely” familiar with the details of liability shift.

No Business is Immune to Fraud

With e-commerce sales set to top $3.5 trillion globally, there’s no doubt that cybercriminals will be looking to scoop a share of the money. While our survey shows that larger retailers perhaps have more to fear from cybercrime, no e-commerce business is immune to the risks.

Current implementations of 3D Secure already go a long way toward overcoming traditional retailer and consumer objections, and the new standard is designed specifically to deliver a great customer experience with even greater fraud protection. This means that many of the 64% of non-users and 24% of users who were ‘not sure’ about adopting 3DS 2.0, could be firmly in the ‘yes’ camp by this time next year.

Issuers: Are You Ready?

It’s all about preparation. There are many reasons why it pays to be ready to leverage 3D Secure 2.0. Explore in more detail the benefits for issuers and merchants and the positive impacts it has on the customer experience.

Author: Heidi Bleau

Category: RSA Point of View

Keywords: 3-D Secure, EMV, Fraud Detection, Fraud Prevention, Risk-Based Authentication, eCommerce, Fraud