May 25, 2023

  • 6 MIN READ

Enhancing security and conversion: a comprehensive guide to implementing 3DS in your checkout

Thomas van Til

Head of Growth


Pursuing growth comes with its fair share of challenges, and one critical concern for ecommerce merchants is fraud prevention. Fortunately, 3D Secure 2 offers a formidable ally in this battle. In this blog post, we will explore the advantages and considerations of integrating this technology into merchants’ checkout process to strengthen their defenses and increase revenue while we’re at it.

3D Secure (3DS) is a robust authentication protocol meticulously designed to bolster the security of online transactions, shielding merchants from fraudulent activities. By implementing 3DS, merchants can significantly minimize the risk of unauthorized transactions while simultaneously optimizing conversion rates – a mutually beneficial outcome for both merchants and their valued customers.

The question naturally arises: Why should ecommerce merchants contemplate integrating 3DS into their checkout process? 

Benefits of Implementing 3DS

The primary objective of implementing 3DS in the checkout process is to minimize fraud and protect merchants and their customers from unauthorized transactions. For ecommerce merchants, the benefits of 3DS are twofold. First, it provides an added layer of security, reducing the likelihood of chargebacks resulting from unauthorized transactions. By incorporating multi-factor authentication, 3DS significantly reduces the risk of unauthorized transactions and fraudulent activities. Here's how:

With 3DS, the authentication process verifies the identity of the cardholder, ensuring that only the authorized user can complete the payment. By requiring additional authentication factors beyond the cardholder's details, such as passwords, tokens, or biometric data, 3DS adds an extra layer of protection against fraudulent activities. This reduces the likelihood of unauthorized transactions safeguarding merchants from financial losses.

The additional benefit of Implementing 3DS for a merchant is the liability shift. When a transaction is authenticated through 3DS, the responsibility for fraudulent chargebacks shifts from the merchant to the card issuer or the cardholder's bank. This means that if a transaction is later determined to be fraudulent, the liability falls on the issuer, providing merchants with added protection and reducing their financial risk.

By leveraging 3DS and benefiting from the liability shift, merchants can focus on their core operations without constantly worrying about the potential losses resulting from fraudulent transactions. This added protection allows you to operate with confidence and peace of mind.

Compliance with SCA

Compliance with SCA regulations is crucial for merchants operating in regions where these requirements are mandated, such as Europe under the Revised Payment Services Directive (PSD2). Implementing 3DS in merchants' checkout process helps them meet SCA requirements and ensures compliance. Here's why it matters:

Non-compliance with SCA regulations can lead to significant penalties, including fines and restrictions on payment processing capabilities. By implementing 3DS and enabling multi-factor authentication, merchants demonstrate their commitment to security and regulatory compliance. This helps to build and maintain trust with regulatory authorities, payment networks, and customers.

Meeting SCA requirements not only helps businesses avoid penalties but also strengthens customer trust. Customers value secure transactions and are more likely to choose merchants that prioritize their security. Implementing 3DS and complying with SCA can give your business a competitive edge by assuring customers that their payments are protected.

Balancing Security and Conversion Rates

While 3DS offers security and compliance benefits, it's essential to address the concern of friction during the checkout process. These additional authentication measures, although necessary for security, may create friction by adding extra steps and potentially lead to cart abandonment. To strike a balance between security and conversion rates,, consider the following strategies:

  • Avoiding Potential Friction
    3DS can add extra steps for customers during the checkout process when there is a challenge flow. This means the issuer has determined the transaction needs additional verification from the customer. The frictionless flow is based on information the customer doesn’t actively have to verify, providing the customer with no disruptions enabling a smooth purchase. We’ll mention some exemptions on how to trigger the frictionless flow later.

  • Offering Clear Explanations
    Transparency is key to maintaining customer trust and reducing uncertainty. Clearly communicate the reasons for implementing 3DS and the additional security measures it provides. Explain how it protects both the customer and the business from fraudulent activities, reinforcing the importance of a secure transaction environment.

  • Offering Customer Support
    Some customers may encounter difficulties or have questions during the authentication process. Offer readily accessible customer support channels, such as live chat or a dedicated helpline, to assist customers and address any concerns promptly. Timely assistance can help alleviate frustrations and ensure a smoother checkout experience.

Utilizing Exemptions

Under Strong Customer Authentication (SCA) regulations, certain exemptions can be applied, allowing transactions to bypass the full authentication process. Leveraging these exemptions can streamline the checkout process and improve conversion rates. Consider the following exemptions allowed under SCA:

  • Low-value transactions, typically below a certain threshold (e.g., €30), may qualify for exemption from full authentication. By exempting these transactions, businesses can provide a more frictionless experience for customers, reducing the likelihood of cart abandonment for smaller purchases.

  • Trusted beneficiaries refer to merchants that customers frequently transact with and have explicitly added to their trusted list. By leveraging this exemption, customers can skip the authentication process when making subsequent purchases from these trusted merchants. This streamlines the checkout experience and improves conversion rates, particularly for returning customers.

  • Transaction Risk Analysis (TRA) takes into account various risk factors, such as transaction value and fraud rate, to determine whether a specific payment requires full authentication. Utilizing TRA exemptions for low-risk transactions allows for a smoother checkout process, reducing friction and improving conversion rates while maintaining security.

It's important to note that exemptions should be implemented judiciously, striking a balance between security and convenience. Assess the risk levels associated with each exemption and consider the impact on your specific business needs and customer base.

Selecting the Right Payment Service Provider (PSP)

When exploring the benefits and considerations of implementing 3DS in the checkout process, it's crucial to select a reliable payment service provider (PSP) that aligns with merchants’ needs and who can support 3DS implementation effectively. We will go more in-depth on this topic in a different blog, but for now there are some factors to consider:

  1. Ensure that the PSP you choose offers compatibility with the latest version of the 3DS protocol (version 2.2).
  2. Look for a PSP that offers flexible authentication options, allowing you to have control over the user experience.
  3. Evaluate the PSP’s capabilities in managing exemptions under SCA. A reliable PSP should provide the tools and features to identify eligible transactions for exemptions.
  4. Consider whether the PSP offers services to optimize conversion rates while maintaining security.
  5. Ensure that the PSP can integrate with your existing infrastructure and whether they have a scalable solution that can accommodate your growing business needs.
  6. Verify that the PSP is fully compliant with relevant regulations, such as SCA requirements in your region.


Implementing 3D Secure in the checkout process offers a range of benefits, including enhanced payment security, compliance with Strong Customer Authentication (SCA) regulations, and improved customer trust - leading to higher conversion! While potential friction during the checkout process is a valid concern, businesses can effectively mitigate it by streamlining the user experience, providing clear explanations, and leveraging exemptions allowed under SCA.

Remember, 3DS is not just about minimizing fraud; it's about building trust, safeguarding transactions, and fostering a secure environment for your customers. By making informed decisions and partnering with a reliable PSP, you can maximize the benefits of 3DS, manage your risk effectively, and drive your online business to new heights of success. Choose your PSP wisely, implement 3DS thoughtfully, and unlock a world of secure and thriving e-commerce transactions.

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