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What is 3D secure? Should it be used on mobile?



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welcome back to the judo wall I'm Dennis

Jones and today I'm going to cover

another topic in preventing fraud this

is a service called 3d secure many of

you probably know 3d secure for when you

buy something from a desktop device

it'll pop up a window that will ask you

to enter a few digit of password that

you set up with your issuing bank so

let's take a step back and even if you

know what this is let's talk about

what's actually going on there so the

purpose of 3d secure is to add an

additional layer of authentication to a

payment in a card-not-present

environment the merchant takes all of

the risk of a payment unless 3d secure

is in place when 3d secure is activated

on an ax merchants account it shifts

some of the liability away from the

merchant and back to either the issuing

or acquiring bank and generally the

issuing bank it's not a hundred percent

taking away that risk but it generally

takes away a great deal of the risk

because what's happening in this process

is the bank is using their own customer

account to verify that the person

entering those card details is the

person that they think should have those

card details

it's called 3d secure because it's doing

three-dimensional security in the minds

of those who have invented it and from

Visa they call it verified by Visa for

mastercard they call a MasterCard secure

code so what are some of the good parts

and bad parts about 3d secure the good

part about 3d secure is that it takes

away some of the risks from the merchant

and in some instances it has been shown

to increase the level of trust that

consumers have in a website however

there are some drawbacks and the

drawbacks are pretty significant on a

mobile environment in particular

so when 3d secure is enabled after the

customers entered all their payment

details and they hit submit they are

redirected to a website that looks

something like this

I mean this website is hosted by the

issuing bank

so if you have a credit card issued by

Barclays card this will be a Barclays

hosted page so the problem on a mobile

device there is the one the amount of

time it takes to load that page leads to

a drop off and conversion and to these

pages are generally not designed very

well for mobile and so where you're

looking to enter your three characters

in your password that becomes quite

difficult in many instances the other

problem with 3d secured on a mobile

device is oftentimes people haven't

registered for 3d secure and so if it's

a new card that you have or it's someone

who's just never been exposed to 3d

secure so a good example there is the

most Americans have never really used 3d

secure and other markets outside of

koryu markets 3d secure is new the first

step is going to be launching a page

hosted by the issuing bank that asks you

to register for 3d secure so again

you're increasing the number of steps

that lead to conversion drop-off in our

fraud product here judo what we do is we

try and limit the usage of 3d secure as

we weigh the cost and benefits of

conversion versus preventing fraud and

our unique solution allows us to route

transactions after they've hit submit

based on a fraud score that we put

against that transaction and so if we

think it's a very low likelihood that

it's a fraudulent payment we'll route it

in the fastest route possible and avoid

3d secure but if we fear for you our

customer the merchants that this might

be a fraudulent payment we'll route it

down the 3d secure route to try and

continue to hold that customer while

protecting you however if we just know

it's a bad payment and it raises all

sorts of flags will immediately deny the

transaction so you don't incur any cost

so again three secure can be a very

useful tool but it's one tool in your

box then what you need to make sure

you're not doing is being overly reliant

on something like 3d secure because it

will drop off the conversion

in your solution and people will go

elsewhere for the product you're

providing that's 3d secure and I'm

Dennis Jones thank you for joining us

today at Judah wall