Other｜Credit Card 3D Secure

This article will cover the following:

• What is 3D Secure?
• Comparison of credit card transactions with 3D Secure enabled and disabled
• Evaluate whether to enable 3D Secure
• Credit card payment processing services that support 3D Secure

1. What is 3D Secure?

3D Secure is a protocol developed by card networks Visa, MasterCard, and JCB, requiring customers to input a valid verification code at the final step of credit card payment. The following describes the differences in transaction processes with the 3D Secure enabled versus when it is disabled.

• 3D Secure disabled
  Customer input their credit card information, including name, card number, expiration date, and CSC code, and submit the information. After the issuing bank confirms the card information, it will authorize the payment. Finally, the payment is successfully completed.
  
  
• 3D Secure enabled
  The customer inputs their credit card information, including name, card number, expiration date, and CSC code, and submits the information. Then, enter the 3D Secure verification page (shown below). The customer can choose from receiving an SMS message that contains the dynamic verification code and inputting the fixed pre-set in the online bank. After the issuing bank confirms the card information, it will authorize the payment. Finally, the payment is successfully completed.

If the customer chooses to receive the verification code on their mobile device, the SMS message will be sent to the mobile number that the cardholder set when applying for the credit card. Only some issuing banks (for example, Taisin Bank, Hua Nan Commercial Bank) will send an email to the email address set by cardholders when applying for the credit card. Below is the 3D Secure example of MasterCard.

 

2. Comparison of credit card transactions with 3D Secure enabled and disabled

After 3D Secure is enabled, orders paid with credit cards are better secured while an additional verification step is added to the payment process. Refer to the following contents for more details.

 

Protection of credit card transactions

i. When a cardholder encounters credit card fraud or unauthorized use, they can request a transaction invalidation from the issuing bank within 120 days of the transaction. If the issuing bank accepts the claim, the merchant’s acquiring bank and payment processor (such as SHOPLINE) will notify the merchant to return the funds.

If the product has already been shipped, the merchant can provide relevant proof to the payment processor, which is called a "Chargeback" by the bank. In reviewing the responsibility of the chargeback, a crucial factor considered is whether the transaction originally went through the 3D Secure verification process.

 

ii. If 3D Secure verification is completed, the payment processor will typically determine the transaction as valid, and the cardholder will be required to pay the amount.

 

iii. If 3D Secure verification is not completed, the payment processor will typically rule that the merchant must bear the loss and refund the amount to the cardholder.

For more details, refer to: Transaction Dispute and Chargeback Management (HK).

Additional steps in the payment process

For credit card transactions with 3D Secure, cardholders must enter a valid static or dynamic verification code within a specified timeframe at the final step. The issuing bank will then determine whether to authorize the transaction. However, cardholders may be unable to complete verification due to the following reasons:

• The cardholders will be unable to receive the dynamic verification code due to not having their phone on hand, an unpaid phone bill, poor signal, or traveling abroad without roaming enabled.

• The SMS will only be sent to the mobile number provided by the cardholder when applying for the credit card. If the number has since been changed, the cardholder is unable to receive the dynamic verification code and should then contact the issuing bank to update their mobile number.

• If the cardholder enters the wrong verification code 3 times in a row, the 3D Secure feature on their credit card will be locked, preventing payment completion. The cardholder should contact the issuing bank to unlock it before further use.
  
  

3. Evaluate whether to enable 3D Secure

If a store has 3D Secure enabled for its credit card payment option, it provides additional protection for the store’s credit card transactions. However, it may slightly reduce the number of orders made by "non-cardholders" as the payment process becomes more difficult to complete. In Taiwan, most payment service providers have 3D Secure enabled by default for credit card transactions. For any related questions, please consult your payment provider.

 

4. Credit card payment processing services that support 3D Secure

The table below shows the credit card payment processing services integrated with SHOPLINE and available for application by Taiwan merchants. You can refer to row "Supports 3D Secure authentication" for more details.

(Right-click to open the image in a new tab)

 

SHOPLINE Payments credit card payment processing service:

SHOPLINE Payments's smart risk control system features dynamic 3D Secure, enhancing brand conversion rates and transaction success rates. Stores can also opt to enable 3D Secure by default.

Brands often face challenges that lead to declines in conversion and success rates. To address this, SHOPLINE Payments serves as an effective solution for SHOPLINE merchants. According to SHOPLINE's observation, one apparel brand saw a nearly NT$500,000 revenue increase within six months of adopting SHOPLINE Payments. Notably, during this period, only one chargeback occurred, amounting to approximately NT$1,000.

This remarkable result stems from SHOPLINE Payments' smart risk control system, which leverages AI features to evaluate the fraud risk of every transaction. With 3D Secure verification, suspicious transactions are flagged and dynamically routed, significantly reducing fraud risk while improving order security.

By minimizing order drop-offs, the system achieves approximately a 5% higher conversion rate compared to competitors. This ensures a safe and smooth payment process for customers.