3-D Secure is a verification process created by Visa and MasterCard to further secure online transactions by allowing the registered cardholder to authenticate and approve transaction.

As more and more consumers shop online, new risks are exposed. The anonymity of the internet poses the danger of unauthorised credit card purchases as there is no way of telling if the consumer is in fact the authorised holder of the card used for payment. In light of these increasing risks to merchants, the card issuers realised that reducing chargeback risk is important in order for the industry to grow.

3-D Secure was introduced in an effort to authenticate shopper identity, reduce online fraud risk, and safeguard credit card payment transactions. Cardholders are being enrolled for 3-D Secure in order to be authenticated as the legitimate cardholder. The authentication provides an extra security step during the cardholder’s online transaction with the retailer. The banks are also requiring all retailers to be enrolled for 3-D Secure by end of February 2015. The advantage is that these retailers will have their chargeback risk reduced by shifting the responsibility of the transaction chargeback risk to the issuing bank of the cardholder.

MasterCard brand their system 'MasterCard SecureCode' and Visa is branded as 'Verified by Visa'

The pictures below depict the shopper's payment experience with both the cardholder’s card and the merchant enrolled in the 3-D Secure program.

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