3D Secure in Banks: Enhancing Security and Customer Experience

3D Secure in Banks: Enhancing Security and Customer Experience

In a world of rapidly evolving financial technologies, the security and convenience of online payments have become paramount for banks and their customers. However, despite the existence of advanced technologies like 3D Secure, which provide additional guarantees and protection, many European banks have yet to fully integrate them into their operational processes. In this article, we will explore how 3D Secure technology can enhance the security of online payments and improve the customer experience, as well as why it is crucial for banks to actively implement this method into their services.

What is 3D Secure?

3D Secure is a protocol that provides an additional layer of security for online card payments. It allows for verifying the cardholder’s identity before authorizing a transaction. The name reflects the interaction of three domains: the merchant/acquirer domain, the issuer domain, and the interoperability domain.

3D Secure helps reduce the risk of fraud using stolen or counterfeit cards, increases trust and loyalty among customers and merchants, and lowers the number of payment declines and disputed transactions.

The Problem

Before adopting 3D Secure, one of our bank clients encountered a series of challenges related to online card payments. Particularly, these issues were prominent in transactions for goods or services that didn’t necessitate the physical presence of the customer or their signature. Let’s delve into the obstacles they faced.

Elevated Fraud Levels

Prior to the implementation of 3D Secure, the bank grappled with a significant surge in fraudulent activities. Customers frequently fell victim to theft, skimming, phishing attacks, and other deceptive maneuvers. Fraudsters exploited stolen or counterfeit card details to conduct unauthorized payments, often unbeknownst to the cardholders.

Inadequate Customer Protection

Clients lacked the means to verify their identity or counteract suspicious transactions effectively. They were also burdened with full responsibility for any losses or damages incurred due to fraudulent activities.

Large Number of Disputed Transactions

A multitude of customers regularly reached out to the bank with grievances or complaints regarding unlawful or erroneous payments. This placed additional strain on the bank’s customer support department and necessitated valuable time and resources for conflict resolution.

Diminished Sales Conversion Rates

Merchants suffered from dwindling prospects as potential customers harbored reservations about online payments. Customer concerns regarding the risks associated with fraud or subpar service deterred them from utilizing their cards for online purchases.

The bank was in dire need of a solution to address these issues and enhance the security and convenience of online card payments. And that’s precisely the solution we provided.

The Solution

We helped implement the use of 3D Secure for all bank customers who held Visa or Mastercard cards. 3D Secure was integrated with the bank’s mobile app, providing extended functionality for financial management.

The primary goal of 3D Secure was to require additional customer authentication before transaction authorization. 

Additionally, the banking app offered the following features:

• Displayed the current balance and transaction history.
• Managed subscription services and allowed the cancellation of unwanted payments.
• Enabled communication with the bank via phone or chat for problem resolution or inquiries.
• Allowed card blocking or unblocking in case of loss or theft.
• Facilitated ordering a new card or changing the PIN.

What the bank achieved as a business:

In the first year of implementing 3D Secure, the bank achieved significant results:

• Fraudulent transactions decreased by 50%.
• Disputed transactions were reduced by 45%.
• Payment declines decreased by 35%.
• Sales and cross-sales of the bank’s products and services increased by 60%.

These results underscore the substantial impact of 3D Secure implementation. It not only bolstered transaction security but also led to notable reductions in fraud, disputes, and payment declines while simultaneously driving growth in the bank’s product and service offerings.

In conclusion, the integration of 3D Secure and the enhancement of the banking app have significantly improved the online payment experience for customers while delivering tangible benefits to the bank as a business.