If you shop online regularly, you’ve almost certainly come across 3 Domain Secure (3DS) at some point. Upon reaching checkout, you’re stopped by an iframe pop up, asking you to use Verified by Visa or SecureCode to enter a long and complex password you probably have trouble remembering, in order to complete your purchase.
It feels as though 3DS has been around for as long as online shopping — and that’s not far off. But while its familiarity can make it feel like a safe option for merchants, the friction it introduces into the customer experience doesn’t fit the smooth, friction-free purchase process that today’s consumers crave.
Friction is the Enemy of Conversion
Akami found that 40% of users will simply leave a website if it takes longer than 3 seconds to load. Amazon famously reported a 1% sales loss for every extra 100ms load time. And the rule of site navigation is that users should be able to find what they’re looking for with three clicks. Friction kills successful sales.
And 3DS means friction. Users might want a page to load in 3 seconds, but with 3DS, authentication takes an average of 37 seconds.
Insisting on an extra password or SMS verification just for a purchase is bad enough, but the original 3DS wasn’t designed for mobile devices and is ineffective outside of web browsers. With 25% of consumers reporting they shop exclusively via mobile devices, that simply isn’t good enough.
Even though 3DS 2.0, which will take time to gain traction, solves the mobile problem, there will still be more friction than customers are comfortable with. Some customers, having gone through the frustrating authentication process, will simply be declined mistakenly. One study earlier this year found that 22% of payments are lost when authenticated using 3DS.
The reality is that everyone is competing with the one-click streamlined purchase experience which users increasingly expect. Sites which don’t insist on SMS verification or biometric confirmation will have an advantage with consumers. And that’s crucial, because 80% of those who have a negative experience won’t come back.
Jumping Through Hoops Doesn’t Trip Up the Fraudsters
The reason merchants turn to 3DS is that they trust it to protect them from the threat of fraud. But the original 3DS hasn’t been effective in that regard for years. The iframe version has vulnerabilities, and fraudsters have found plenty of ways to get around 3DS. Account takeover, which is emerging as a serious threat, gives the criminal access to the email account used for passwords. Fraudsters have also had success spoofing sim cards to divert SMS messages.
Even with the more up to date 3DS2, fraudsters have the advantage. The technology does not look at the entire customer journey, meaning a huge amount of the information which is so valuable for identifying fraud goes unused. The system knows this, of course, and accommodates it by taking a risk-averse attitude, turning away good sales.
On the flip side, 3DS’s focus on the point of transaction means that the rest of the customer journey goes unprotected — something which is a real risk at a time when criminals are actively exploring ways to target other points in the user experience from login to loyalty programs to coupon usage.
A More Reliable Liability Shift is Needed
The other reason merchants turned to 3DS was to benefit from the liability shift it provided. If an approved transaction turned out to be fraud, the merchant would not have to pay the cost themselves. Unfortunately the liability shift is not entirely reliable, since it is up to the issuer to determine when it ought to apply.
If that is a true concern, then using a fraud vendor like Forter which offers a full chargeback guarantee with no questions asked for any approved transaction, is far more reliable.
Frictionless Fraud Prevention That Protects the Customer Journey
Forter’s fraud prevention was created to be frictionless, and that has been a guiding principle of the company since its inception. Forter provides instant approve/decline decisions for every single transaction, and offers a full chargeback guarantee -—making out-of-date solutions such as 3DS unnecessary.
Forter’s accuracy comes from proprietary technology which can link accounts and transactions even when not a single apparent data point is shared, and which looks for the real story behind the user. High approvals come as standard.
Forter has everything 3DS tried to provide — without the friction. Get in touch to learn more about our fraud prevention solution.
