Reducing Ecommerce Fraud with 3D Secure

Peyton Hamel on | 2 min read

In 2022, ecommerce losses to online payment fraud were estimated at 41 billion U.S. dollars – with further growth to be expected. The projected rate of increase in ecommerce fraud emphasizes the need for merchants to take extra measures to protect their businesses. Merchants should consider this one simple but effective method to reduce ecommerce fraud: 3D Secure.

3D Secure

Visa established the first 3D Secure in 2001, known as “Verified by Visa.” Several other companies provided similar protocols. Mastercard developed “Mastercard SecureCode” in 2002, while American Express introduced “American Express SafeKey” in 2010. Despite the name differences, they all serve the same purpose of adding an extra layer of security for both merchants and customers.

3D Secure is a security protocol designed to provide an additional layer of protection for online credit and debit transactions. With 3DS, merchants offer a two-step authentication for every online purchase by requiring a PIN code in addition to the usual credit or debit card details to verify that the customer is the authorized card holder. This helps to prevent unauthorized use of a card by someone who may have stolen or otherwise obtained the card information.

In the event of fraudulent activity, 3D Secure provides a liability shift from the merchant to the card issuer. By definition, this means that if the card issuer has enrolled the cardholder in 3D Secure and the transaction was authenticated using the protocol, the liability for any fraud is shifted from the merchant to the card issuer. Therefore, merchants are not deemed liable for the fraudulent activity.

Merchants also have access to additional information during the authentication process of 3D Secure. The IP address of the customer, type of device, and transaction history are available to the merchant. This information can help merchants assess the risk of transactions in order to flag any suspicious activity.

Advantages and Disadvantages

Even though the 3D secure process has advantages, there are always disadvantages to consider.


  • More security for customers, and, hence, customer loyalty due to increased sentiments of security

  • Credit card providers bear the costs of fraud despite 3D Secure (liability reversal)

  • Procedure is free of charge for everyone involved


  • More effort for customers due to having to punch in a PIN code

  • Lower conversion rates for merchants

  • Security cannot be completely guaranteed, but it will be guaranteed to help

Customers and Integrations

Customers should feel more enabled and empowered with their buying decisions through having an integrated 3D Secure process in a merchant’s store because they more often than not benefit from this secure and modern process.

If a merchant has a WooCommerce store, they have the ability to utilize PeachPay in order to easily access 3DS. PeachPay is an all-in-one payments and checkout solution for WooCommerce merchants. It’s essentially a plugin that centralizes payment methods for a one-click checkout method. All the payment methods have built-in 3DS, and merchants can enable it if they want improved security and a decreased risk of fraud.

3DS is intended to make online transactions more secure to protect both the cardholder and the merchant from fraud. While it is not foolproof, it provides a much-needed additional layer of security against unauthorized transactions to reduce the risk of fraudulent activity. Merchants should always be vigilant and use multiple layers of security to protect themselves and the customers.

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