Visa plans to support 3-D Secure 2.0 in an upcoming enhancement to its Verified by Visa service, giving merchants and issuers real time accurate customer authentication of cardholders and a superior end user checkout experience.
Checkout time with the latest version of 3-D Secure can be reduced by 85% and consequently, cart abandonment is also seen to reduce by as much as 70%, Visa said in a Tuesday press release.
Merchants and issuers are already working on their implementations and Visa expects adoption to begin in the latter half of 2017. To ensure issuers and merchants have adequate time for the transition, current Visa rules for merchant-attempted transactions using 3-D Secure will extend to the updated version beginning April 2019.
The update to 3-D Secure is long overdue; Verified by Visa was developed in 2001, adding cumbersome pop-up windows to the checkout process online. According to Ali Raza, Lead Principal Advisor at UL Transaction Security, “3-D Secure (3DS 1.0) severely damaged the customer experience and led to significant cart abandonment.”
Payment behavior has changed considerably since the first iteration of 3-D Secure.
According to Visa’s 2016 Digital Payments Study of over 36,000 European consumers, three times as many people pay regularly using a mobile device compared to 2015 (54 percent vs 18 percent). The latest version of 3-D Secure is designed to address this shift in digital commerce trends.
“The primary enhancements of 3DS 2.0 include the support for in-app purchases on mobile phones and other devices, support for biometric authentication methods, and the ability for the issuing banks to perform risk-based decisions, enabling a frictionless consumer experience when authentication is not required,” Raza said.