Integration of 3D Secure into Visa and MasterCard 

Online transactions via credit and debit cards have become commonplace in our country with the rise of ecommerce and digital payments. But, data theft caused by fraudulent transactions continues to be a matter of concern. 3D Secure, a security protocol system was designed to address these concerns. Verified by Visa and MasterCard Secure Code are payment security services based on 3D Secure. 

In this blog, we will delve into the details of 3D Secure Services and how Visa and MasterCard have incorporated it. 

What iIs 3D Secure Service? 

First of all, let us understand what 3D Secure Service is. CA Technologies, previously called Arcot Systems developed this payment protection program. Visa was the first important credit card network to use this program to facilitate secure online payments. 

3D gets its name from a 3-domain model whose underlying objective is to provide an added layer of protection for authentication during an online financial transaction. There are three essential parties under this model whose function is to add a layer of protection. These are:

  • Acquirer Domain

This is the financial institution or merchant receiving payment via online transaction.

  • Interoperability Domain

It’s the card system or infrastructure that is necessary to support 3D Secure Services.

  • Issuer Domain 

The financial institution that has issued a credit or debit card falls under this domain.

How Does a 3D Secure Payment Work? 

Now, we will discuss how the system of secure payment works through these points: 

  • When you carry out an online transaction through a 3D Secure payment gateway, the system will redirect the payment process to the website of the bank that issued the MasterCard or Visa card. 
  • Then, the 3D Secure Payment Service provider will connect with a directory server to receive the necessary notification about a card being registered under its program. 
  • After the second step, the 3D Secure Payment Service provider will instruct the buyer to insert a PIN/password/OTP to confirm the cardholder’s identity. 
  • The payment gateway receives the result of the authentication procedure and submits every detail to the acquirer domain. 
  • After this, the acquiring bank conducts an authentication process to confirm the cardholder’s identity. In other words, your system, the acquiring and issuing banks exchange coded information and issues acceptance or rejection. 
  • In the end, the customer can see on the message displayed onscreen whether their payment has been accepted or declined. 

If a customer is enrolled in either the MasterCard SecureCode or the Verified by Visa program, they have to undertake the additional step of entering a password. Merchants can decide which type of transactions require verifications from 3D Secure.

Why Is 3D Secure Payment Gateway So Popular? 

Let us explore a few important reasons why this secure payment service has become so popular: 

  • Cutting Edge and Trustworthy Technology 

The 3D Secure Payment Service system has led to a significant reduction in online fraud. Its partnership with online fraud prevention tools like address verification services, and cardholder verification value have helped further increased the trust of users. 

  • Increases the Confidence of Online Buyers

An important point to note is that 3D Secure Payment Services has considerably improved the level of confidence of users regarding online financial transactions. As a result, people are increasingly relying on online shopping for all their needs. Along with an improved level of confidence in payment protection, ease and convenience are other factors contributing to the rise of online shopping. 

  • Validation of Debit Cards 

Previously, security concerns barred debit cardholders from making online payments which kept a large number of people away from ecommerce. After 3D Secure Payment Services were introduced and incorporated by Visa and MasterCard, the Reserve Bank of India started allowing debit cardholders to carry out online shopping. 

  • Reduction in Stress Level 

Online shoppers can remain stress-free while shopping online if they are secured by 3D Secure. They need not be worried about the retailer’s integrity because their credit card will be used in a safe and secure manner. Before the introduction of this added layer of payment protection, there remained an element of doubt regarding the authenticity of the seller. 

What Is Verified by Visa? 

Visa has integrated the 3D Secure Payment System into its process in the form of Verified by Visa, which is a password-protected authentication system. It has been specially created to confirm the identity details of the cardholder whenever a Visa card is being used online. 

When a Visa cardholder enters a unique password, it is easier for the bank to check whether it is the cardholder who is entering the details on the ecommerce site or a fraudster. 

As a Visa cardholder, you need to first register for the Verified by Visa program. The entire process will not take more than a few minutes. 

Once it gets activated, Verified by Visa will provide the necessary protection whenever you participate in an online transaction. In other words, your card will be automatically recognised as Verified by a Visa-protected card during online shopping. 

What is the MasterCard 3D Secure? 

MasterCard is the world’s second most popular credit card network after Visa and it has integrated 3D Secure Payment Services as well, in the form of MasterCard SecureCode. It provides adequate protection against unauthorised and fraudulent usage of credit and debit cards during online transactions. MasterCard SecureCode service is provided by the bank that issued the card.

The security protection that MasterCard 3D Secure Service provides includes everyday protection and online protection. With this feature in place, online shopping has become easier. 

Final Words

The integration of 3D Secure Payment Services into MasterCard and Visa cards has increased the number of online shoppers. The payment protection system provides an additional layer of protection to the authentication system during online transactions. It has provided the much-needed confidence to cardholders that important data will remain secure when they go online shopping. 

Frequently Asked Questions 

How will MasterCard SecureCode alter the online shopping process? 

The online shopping process will not undergo any changes except for the fact that you will have to provide your SecureCode during checkout. Don’t worry about the code getting revealed to the merchant during the checkout process, because it will not be. 

How is SecureCode different from Zero Liability? 

MasterCard SecureCode provides additional protection to prevent unauthorised usage. In case there has been a fraudulent or unauthorised transaction, the Zero Liability facility will provide coverage for losses. 

How do I know whether a merchant participates in SecureCode?

Merchants display the SecureCode brand mark which is how you will come to know whether they are a participating entity or not. When you buy a product from a participating merchant, you will be asked to provide a password or an OTP to confirm your identity. 

Chief Compliance and Legal Officer at Wint Wealth

Nishant is a qualified lawyer from NALSAR University of Law, Hyderabad having 7+ years of experience and is the Chief Compliance and Legal Officer at Wint Wealth. He has been working in the finance and wealth management space for the past 5+ years and is an NISM certified mutual fund expert.
He has previously worked for Khaitan & Co and Scripbox.

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