Chargeback changes with the Mastercard Dispute Resolution Initiative
For years, the payments industry has associated 3D Secure with a terrible shopper experience.
This led to a general reluctance to adopt the extra security layer that it offers.
For many businesses, this is a missed opportunity.
After analyzing 3D Secure data across 18 global markets in early 2014, we found that in six markets, implementing it across all transactions actually had a positive net effect on conversion. This includes the UK, India, and Russia, as well as others.
The “net” part of the last sentence is important. At first glance, this seems to suggest that a market-by-market approach might help combat fraud and increase conversion.
But this is not the case. Even within the UK, multiple factors affect conversion rates.
For example, we found that using 3D Secure on Visa debit cards in the UK increases the conversion rate by an average of almost 8%.
But for Visa business credit cards in the UK, it actually decreases conversion by an average of almost 7%.
Since market and card types have an effect on 3D Secure, it's no surprise that many factors affect conversion rates too.
In particular, 3D Secure’s horrible mobile experience has an impact on conversion.
Other factors can be the transaction value such as time to booking, day of week, time of day. These factors relate to sophisticated fraudsters identifying when fraud teams are off work.
There's also repeat shoppers not having to go through the 3D Secure step repeatedly.
These factors are examples. Your situation will vary based on industry, markets, card types, customer payment preferences, and so on.
With that in mind, it's encouraged to go with a dynamic approach to using 3D Secure.
Customize which transaction types should be routed through 3D Secure. Assess the factors that are most risky for your business situation, and consider automating 3D Secure as an extra security layer just for those particular transactions.
High drop-off rate on 3D Secure transactions can be shoppers thinking it's a security threat. It's smart to let shoppers know about the security benefits.
As businesses expand what works today may not be valid tomorrow. This is true for attempted fraud, as fraudsters change tactics in an attempt to beat the system.
In the near to mid term, it is highly likely there will be increased adoption of 3D Secure due to the support of:
By applying a dynamic approach to 3D Secure you can optimize security and increase conversion rates.
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