Contactless and online credit/debit card payments are quickly becoming the de facto way to transact with cards around the world.

Therefore, the need for robust security mechanisms like EMV 3D Secure is more critical than ever before. That’s because online payment fraud is still a serious threat for consumers, businesses, and financial institutions alike.

This article will walk through how EMV 3D Secure operates, and how vital it is for digital payments. We’ll also explore how 2C2P plays an instrumental role in enhancing transaction security.

Understanding EMV 3D Secure

EMV 3D Secure is a security protocol created in 1999 to authenticate online transactions where customers don’t have to present their credit or debit card.

This layer of protection was crucial, especially as the growth of e-commerce and usage of mobile devices surged and customers made more online card-not-present (CNP) transactions. Over time, EMV 3D Secure came to be considered the gold standard for authentication by card networks.

Wondering how EMV 3D Secure works? The protocol comprises three main domains which work together to authenticate transactions:

• Interoperability: The communication infrastructure which links the issuer and acquirer domains. It ensures information is securely exchanged between them.
• Issuer: The card issuing bank responsible for verifying the card owner’s identity.
• Acquirer: The merchant’s bank or payment gateway processing the transaction.

When a transaction happens, the card owner verifies their identity via a password, biometric data, one-time password, or any other similar method they choose.

How EMV 3D Secure authenticates transactions in 10 steps

Here’s a breakdown of the steps that take place when customers transact online with their credit or debit card, showcasing where EMV 3D Secure comes into play:

Step 1: Customer makes a purchase

3DS2 supported biometric authentication and one-time passwords, making checkout easier.

Step 2: 3DS Server creates authentication request

The 3D Secure (3DS) Server generates an authentication request and sends it to the appropriate Directory Server based on the card’s issuer.

Step 3: Directory Server sends data to Access Control Server (ACS)

Using the card’s Bank Identification Number, the Directory Server identifies the issuer’s Access Control Server (ACS) and forwards the transaction and authentication data for evaluation.

Step 4: Risk-based authentication by ACS

The ACS evaluates the transaction using AI/ML-driven Risk-Based Authentication (RBA), analysing device, location, and behavioral data.

Based on this risk assessment, the ACS determines if additional steps are needed: Low-risk transactions may be allowed a frictionless flow, while higher-risk transactions may trigger a challenge.

Step 5: Directory Server sends result to 3DS Server

The Directory Server logs its evaluation result (frictionless or challenge flow) and sends it back to the 3DS Server.

Step 6: 3DS Server sends result to the customer

The 3DS Server forwards the result to the merchant’s payment gateway and then the customer. If a challenge is needed, the challenge URL is included to initiate the next step.

Step 7: Customer completes challenge flow

If required, the customer completes the challenge flow (e.g., OTP, fingerprint, app notification). A customer may be allowed a certain number of attempts to complete the challenge flow successfully.

Step 8: ACS finalises authentication

The ACS evaluates the challenge outcome and returns the final authentication result (success or failure) to the Directory Server.

Step 9: Directory Server and 3DS Server confirm outcome

The Directory Server and 3DS Server exchange final messages confirming the authentication result and notify the merchant of the outcome.

Step 10: Transaction authorisation continues

If authentication is successful, the merchant’s payment gateway proceeds with transaction authorisation through the card network to the issuer.

The power of risk-based authentication

With risk-based authentication, checkouts are much smoother. The result? Higher customer satisfaction and a lower risk of cart abandonment.

Although ‘higher-risk’ transactions need additional verification, having multiple authentication methods means customers will never be stuck with forgotten passwords again.

2C2P’s comprehensive approach to enhancing security

We leverage the latest tech to execute EMV 3D Secure’s strict transaction authentication process. We also adopt a holistic approach, deploying specialised components like advanced Access Control Servers, enhanced Risk-Based Authentication modules, and optimised 3D Secure Servers.

We also provide full integration solutions for the components above, and adopt a customer-first approach. This ensures that businesses’ 3D Secure process is streamlined and cohesive.

Advanced Access Control Servers

Our advanced Access Control Servers play an important role in authenticating transactions by requiring card owners to verify themselves with dynamic one-time passwords, mobile device authentication, and more.

Card issuers can then process the payment securely. The best part is that you can customise your Access Control Server to suit your customers’ profiles.

Enhanced Risk-Based Authentication modules

Our Risk-Based Authentication modules use AI and machine learning algorithms to assess risks more accurately and in real-time. By analysing different transaction data points (device fingerprinting, geolocation checks, etc.), these modules take the initiative in detecting outliers which indicate potential fraud cases.

We ensure our fraud prevention is robust while significantly minimising false positives. Genuine transactions enjoy safe and smooth checkouts.

Optimised 3D Secure Servers

Our optimised 3D Secure Servers act as a secure intermediary between merchants and card issuers. They let merchants efficiently initiate and manage transaction authentication requests, route these appropriately, and ensure that merchants meet the latest EMVCo standards.

This greatly reduces the risk of transactions being declined due to technical errors or miscommunication.

When our 3D Secure Servers optimise data exchanges between card issuers and merchants, we boost authentication success rates. Customers are more likely to be satisfied with their checkout experience, and businesses enjoy a higher conversion rate.

Customer-centric solutions

No matter what industry your business operates in, we provide tailored solutions, real-time monitoring, detailed analytics reporting, and more to meet your needs.

Our expert teams also offer personalised consultations, ensuring you have the most effective security protocols for your target audience.

Future trends in security, and 2C2P’s unwavering commitment

Looking ahead, emerging trends such as the integration of blockchain technology and behavioural analytics are poised to further enhance transaction security. Bad actors may be more sophisticated, but this only encourages us to stay updated on security measures to ensure that customers continue making online purchases with full peace of mind.

EMV 3D Secure and Risk-Based Authentication are critical components of secure online transactions, and 2C2P plays a key part in supporting issuers and acquirers to implement these measures effectively. We’re always committed to helping businesses and financial institutions provide secure, seamless, and adaptive online payment experiences.

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Amplify your payments ambitions further with our suite of solutions – customised to fit your company’s unique needs and scale. Reach out to our friendly team today.