Table of Contents
What is 3DS?
3D Secure (3DS) is an additional security layer for credit card transactions on online merchant websites and applications. In Indonesia, it is commonly required by the card issuer (issuing bank) to help secure online payments.
The “3D” in 3D Secure refers to the three domains involved in the authentication process:
- Card Issuer: The bank that issues customer’s payment card
- Acquirer: The acquiring bank or payment provider that processes transactions on behalf of the merchant.
- Payment Network: The card payment networks like Visa, Mastercard, or JCB
The primary purpose of 3DS is to reduce the risk of card misuse, data theft, and fraudulent online transactions.
How does 3DS Work?
In simple terms, the 3DS authentication flow goes like this:
1. Customer Enters Card Details
During checkout, the customer enters their card number, expiration date, and CVV.
2. System Enables 3DS Verification
The payment gateway or acquiring bank will detect that the card supports 3DS authentications.
3. Customer Completes Authentication
The customer is asked to perform an additional verification step, such as entering a PIN or a One-Time Password (OTP) sent to their registered mobile phone number.
4. The Issuing Bank Validates the Transaction
If an authentication is successful, the transaction will proceed and the payment will be approved.
Why is 3DS important for Business?
1. Minimizes Fraud Risks
3DS helps ensure that the actual cardholder is truly involved in the transaction. Additional verification methods such as OTPs or biometrics provide an extra layer of security.
2. Reduce Chargebacks
Since the transaction has undergone additional authentication, the risk of disputes resulting from unauthorized transactions is significantly lower.
3. Increase Customer’s Trust
Customers will feel safer when making transactions on websites or applications that have additional security systems.
4. Supporting Regulatory Compliance
In many countries, including Indonesia, the use of additional authentication for card transactions is an important part of digital payment security standards.
By implementing 3DS, businesses can not only protect revenue from unauthorized transactions and chargebacks, but also strengthen customer trust by providing a safer payment experience.
