3D-Secure, a big promise of protection at the expense of volume? THINK AGAIN

Post 4 of 11

3D-Secure news from AlgoChargeDid you know that 3D-Secure approval rate is as high as face to face approval rate?    

Read the below  latest news on 3D-Secure transactions  data provided by Endeavor.  It will amaze you!

Attend any payments conference and what you will witness is the fraud detection industry competing on who makes the most detrimental claims regarding 3DSecure; To this end, we decided to take a week of transactions from this month and run reports for two different regions. This will give our readers hard facts against unsubstantiated information frequently permeating the industry.The below graph shows 3D-Secure processing for a European based processor. 94.12% of the MasterCard traffic and 88.05% of the Visa traffic for this chart is coming from the UK and it’s all enrolled. The rest is distributed from 15 other countries and contains both enrolled and not participating cards.

3D-Secure Online Payment AlgoCharge

When it comes to measuring the impact of 3D-S on transaction processing, there are several terms which are in use and sometimes used wrongly or out on context.

So in this article we take a closer look at the various rates used to measure the effectiveness of transaction processing. We also share information provided by MasterCard to further back up our own data.

Terms in use:

Conversion Rate

This is the overall ratio of people on website who end up making a purchase.

Drop Out Rate

This is the ratio of cardholders who are presented with 3DS sign up while shopping and end up not completing the purchase.
Aborted Rate This is the ratio of cardholders who are already signed up for 3DS, but who abandon a transaction at the Authentication stage.3dSecure online payments AlgoCharge

Approval Rate

This is the ratio of transactions presented to Issuer which are approved.

The conversion Rate encompassed all the other scenarios, so it’s best to examine the other scenarios separately to get any meaning from the numbers.

So let’s start:

  • Dropout Rate:  Where cardholders are required to sign up for the first time for 3DS, while shopping, the dropout rates are high. Shoppers do not like to be interrupted. This one time setup is long past for most cardholders around the world and is therefore of most interest to the US market where the signup process is ongoing.

In any case the majority of banks now opt for other methods of setting up their card holders for 3DS; methods which does not involve inconveniencing charholders while shopping.

Amazingly, this is the figure which is quoted by companies offering supposed alternatives to 3DS!.

·         Aborted Rate: This rate is a measure of transactions for which authentication was never completed. If one had to argue that 3DS loses sales, this would be the rate to look at!

We looked at a European processor and found that only 0.648% of transactions were abandoned at the authentication stage and never completed.

We also looked at a Middle East based processor with traffic spanning 135 countries and the aborted rate was only 1.245%.

These aborted transactions also concentrate all the fraudulent attempts.

·         Approval Rate: MasterCard has provided the following information regarding the approval rates for 3DS; Domestic and Cross border in this table does not refer to one particular country, but is an amalgamation of data from a number of countries.

Approval Rate
Transaction Type Not eCommerce Non SecureCode (210) Fully Authenticated (212)
Authorizations – Face to Face domestic 95%           –                           –
Authorizations – Face to Face Cross Border 87%           –                           –
eCommerce Authorizations Domestic          – 83% 94%
eCommerce Authorizations – Cross Border          – 74% 90%


·         What this table shows is that for domestic transactions the approval rate for 3DS is the same as for Face to Face transactions! Domestic Face to Face is really the optimum scenario for a card to be approved – so for ecommerce transactions to be operating at this optimal level – it is really an Amazing Result for 3DS!

Furthermore, for cross border the approval rate with 3DS jumps from 74% for non 3DS to 90% for 3DS, a whopping 16% change. Put another way, merchants processing cross border transactions without 3DS are losing 16% of their business. They may be losing even more business through ineffective and expensive fraud detection and false positives.

The data shows clearly that 3DS does not lose business but actually has the exact opposite effect. In addition there is a liability shift on these approved transactions which cannot be created in any other way. There are no false-positives, no expensive fraud detection tools and merchants are able to expand their business to bigger markets.


This article was written by admin_algocharge