The Internet has created new online shopping convenience for cardholders and merchants. Ecommerce transaction volume continues to grow and the potential growth over the next five to ten years is significant. Even with these favourable trends, there are concerns regarding the potential for fraudulent use of payment cards on the Internet.

Chargeback rates for Internet purchase transactions are several times the system average and Internet-related fraud cases constitute a significant percentage of all reported fraud cases. The majority of the chargeback reasons are fraud-related or cardholders claiming non participation.

The 3D Secure protocol was developed by Visa to improve the security of Internet payments. It is designed to allow authentication of cardholders by their Issuers at participating merchants. The objective is to benefit all participants by providing Issuers the ability to fully authenticate cardholders during an online purchase, reducing the likelihood of fraudulent usage of credit and debit cards and improving overall transaction performance.

Visa has licensed the 3D Secure protocol to other major payment brands, establishing the 3D Secure protocol as a global standard for authenticated payments. Visa’s 3D Secure brand is called Verified by Visa. The equivalent MasterCard brand is called MasterCard SecureCode. From August 2007 the SecureCode authentication has been mandated by MasterCard for ALL Maestro internet transactions and is therefore essential for Merchants.

How 3D Secure Works

Cardholders must register their cards at the Issuer's registration site to take advantage of the service. Typically, this one-time process involves answering several security questions to which only the Issuer and the cardholder know the answer. The cardholder selects a password and agrees on a secret phrase, which will be used by the Issuer during each transaction.

When shopping online cardholders must enter their password before their online transaction can be authorised. In seconds, the issuer confirms it is the true cardholder performing the transaction. Cardholders enjoy peace of mind knowing that no one else has access to their password. The authentication data gives the merchant explicit evidence of an authorised purchase.

3D Secure enabled merchants immediately benefit from a chargeback liability shift on all transactions. This means that merchants are no longer liable for chargebacks where the cardholder claims fraud or non participation (including transactions where the cardholder is not yet enrolled for 3D Secure).

Metacharge were among the earliest Payment Service Providers to adopt 3D Secure and the service is fully supported across all our systems. It can be enabled automatically for Standard (hosted) account holders whilst Corporate (remote) accounts benefit from the simplicity of a dedicated and integrated Metacharge Merchant Server Plug In (MPI).