{"id":1494,"date":"2022-10-30T12:30:00","date_gmt":"2022-10-30T02:30:00","guid":{"rendered":"https:\/\/blog.gpayments.com\/?p=1494"},"modified":"2025-02-24T11:15:18","modified_gmt":"2025-02-24T01:15:18","slug":"3ds2-fraud-prevention-solutions-for-ecommerce","status":"publish","type":"post","link":"https:\/\/www.gpayments.com\/blog\/article\/3ds2-fraud-prevention-solutions-for-ecommerce\/","title":{"rendered":"3DS2 Fraud Prevention Solutions for Ecommerce"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">Online retail payments are booming. <\/span><a href=\"https:\/\/www.trade.gov\/market-intelligence\/australia-ecommerce\"><span style=\"font-weight: 400;\">Ecommerce revenue in Australia<\/span><\/a><span style=\"font-weight: 400;\"> is predicted to reach USD $32.3 billion by 2024 according to the U.S. Department of Commerce. Additionally, <\/span><a href=\"https:\/\/www.trade.gov\/market-intelligence\/australia-ecommerce\"><span style=\"font-weight: 400;\">mobile payments represent 26.4%<\/span><\/a><span style=\"font-weight: 400;\"> of all online transactions according to PayPal. GPayments knows a thing or two about how to promote secure, reliable and frictionless ecommerce transactions\u2014 a 3D Secure 2 fraud prevention solution.\u00a0<\/span><\/p>\n<h2><b>Who needs ecommerce fraud prevention solutions?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Online payments fraud, in particular, card-not-present (CNP) fraud is a concern for:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cardholders concerned with protecting their privacy and digital pocketbooks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Payment gateways and merchants needing to reduce their financial and reputational fraud losses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Financial institutions incentivised by regulations and customer experience to provide a safer online shopping environment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Regulatory bodies concerned with the global competitiveness of their country\u2019s ecommerce sector.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The financial losses of fraudulent activity are too great to be ignored. According to the Australian Payments Network, <\/span><a href=\"https:\/\/www.auspaynet.com.au\/insights\/Media-Release\/FraudStats_Jul2020_To_Jun2021\"><span style=\"font-weight: 400;\">card fraud totalled $490.1 million<\/span><\/a><span style=\"font-weight: 400;\"> from 1 July 2020 to 30 June 2021, an increase of 9.2% from FY2020. And, CNP fraud rose by 12.3% to $442 million in FY2021.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fraud risk is everyone\u2019s problem. And all will benefit from a keener industry focus on protecting sensitive data and advances in fraud detection software. However, those who need a fraud solution are the businesses directly affected, including: online retailers, payment gateways, issuers and acquiring banks.\u00a0<\/span><\/p>\n<h2><b>When fraud prevention measures aren\u2019t enough<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Fraud protection is only part of the picture. As cybercrime increases, credit card fraud prevention is in everyone\u2019s best interest. Thankfully, there are several solutions for online merchants, payment gateways, banks, credit card networks and cardholders to guard against fraudsters.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are a few broad fraud prevention measures:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fraud detection education that thwarts cybercriminals stealing critical data.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Regulations aimed at detecting suspicious activity and reducing the risk of fraud such as EMVCo and PSD2.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advancements in data analytics like using artificial intelligence (AI) and machine learning (ML) to manage risks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Technological solutions that are 3D Secure 2.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Fraud management is a complex issue. Unfortunately, cyber thieves find their way around prevention measures by switching channels or tactics. For example, <\/span><a href=\"https:\/\/www.securitymagazine.com\/articles\/93912-reasons-digital-fraud-is-on-the-rise\"><span style=\"font-weight: 400;\">online fraud increased<\/span><\/a><span style=\"font-weight: 400;\"> after in-person CNP fraud became more challenging with EMV chipped credit cards. Also, when suspicious activity is mismanaged (false declines) ecommerce retailers see reduced sales and profits. Furthermore, the <\/span><a href=\"https:\/\/blog.gpayments.com\/article\/common-warning-signs-of-cnp-fraud-how-merchants-can-take-advantage\/\"><span style=\"font-weight: 400;\">average cost of a single chargeback can be about $144<\/span><\/a><span style=\"font-weight: 400;\">, which adds up every month.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fraud detection and prevention is critical to ecommerce but it shouldn\u2019t come at the expense of doing business at all.\u00a0<\/span><\/p>\n<h2><b>Fight cyber fraud with a 3DS2 solution<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">To fight fraud all parties \u2014 merchants, payment service providers and banks \u2014 need a secure message flow. A 3DS2 solution provides strong customer authentication (SCA) but doesn\u2019t create friction and negatively impact the customer experience. The 3DS2 protocol for authentication, benefits ecommerce in several ways, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Liability shift:<\/b><span style=\"font-weight: 400;\"> Issuing banks are responsible for chargebacks, instead of merchants or acquiring banks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cart abandonment: <\/b><span style=\"font-weight: 400;\">Customers experience a frictionless payment experience.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Mobile ready:<\/b><span style=\"font-weight: 400;\"> Challenge screens operate within a mobile app for a unified buyer experience.<\/span><\/li>\n<\/ul>\n<h2><b>How does 3DS2 help prevent fraud?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">3DS2 helps merchants, banks and credit card issuers prevent potential fraud at checkout with a coordinated layer of fraud detection. All merchants accepting major card schemes in countries following payment services directive 2 (PSD2) must abide by its SCA requirements. With this authentication framework in place, a 3DS2 fraud prevention solution can utilise analytics, AI and ML to apply PSD2 authentication or an authentication exemption automatically to any transaction.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At checkout, 3DS2 Server facilitates the flow of transaction data between the cardholder, the directory server of each card scheme and the issuing bank. With 3DS2, payment and authentication flows occur on the same route, greatly reducing inputs from the cardholder or skipping the authentication of a verified customer altogether. By not forcing a customer to authenticate, a 3DS2 solution avoids cart abandonment, improves customer experience and makes it harder for fraudsters to collect valuable data at the time of payment.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fraud detection must find a way to determine a suspicious activity or user. For example, when a cardholder travels abroad and uses their card, this can trigger the need for greater data inputs at the time of transaction. This could mean that a cardholder may need to answer security questions to proceed, even after entering a username or passcode. When banks use risk-based authentication (RBA) measures to meet SCA protocols and protect customer data, they can create authentication exemptions for faster, more secure transactions.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Cyber fraud prevention is a global priority. In Australia, the <\/span><a href=\"https:\/\/www.rba.gov.au\/payments-and-infrastructure\/role-of-payments-system-board\/\"><span style=\"font-weight: 400;\">Payments Systems Board of the Reserve Bank<\/span><\/a><span style=\"font-weight: 400;\"> has far-ranging responsibility for payment system policy, including supporting a secure, reliable and competitive environment for digital payments \u2014cards, ewallets, and account-to-account. As\u00a0 governmental policy and card schemes <\/span><a href=\"https:\/\/www.pymnts.com\/news\/international\/latin-america\/2022\/how-millennial-gen-z-consumers-are-shaping-latin-americas-digital-first-banking-future\/\"><span style=\"font-weight: 400;\">cooperate to tackle fraud prevention policy<\/span><\/a><span style=\"font-weight: 400;\">, 3DS2 solutions promote risk assessment data exchange between banks, merchants and card issuers and have successfully reduced fraud loss significantly.\u00a0<\/span><\/p>\n<h3><b>Fight cyber fraud with a 3DS2 solution<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">A 3DS2 fraud detection solution offers a secure, frictionless flow of data and a 95% rate of approval for transactions, that means everyone wins.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Explore <\/span><a href=\"https:\/\/www.gpayments.com\/index.html#heading-see-our-products-for\"><span style=\"font-weight: 400;\">GPayments 3DS2 fraud prevention solutions<\/span><\/a><span style=\"font-weight: 400;\"> for merchants, payment gateways and issuers. <\/span><a href=\"https:\/\/www.gpayments.com\/contact\/\"><span style=\"font-weight: 400;\">Contact us<\/span><\/a><span style=\"font-weight: 400;\"> and let us know how we can best support you.\u00a0<\/span><\/p>\n<p><br \/><br \/><\/p>\n<p>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Online retail payments are booming. Ecommerce revenue in Australia is predicted to reach USD $32.3 billion by 2024 according to the U.S. Department of Commerce. Additionally, mobile payments represent 26.4% of all online transactions according to PayPal. GPayments knows a thing or two about how to promote secure, reliable and frictionless ecommerce transactions\u2014 a 3D [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":1512,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,9],"tags":[],"class_list":["post-1494","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-article","category-user-guide"],"aioseo_notices":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/posts\/1494","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/comments?post=1494"}],"version-history":[{"count":5,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/posts\/1494\/revisions"}],"predecessor-version":[{"id":2177,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/posts\/1494\/revisions\/2177"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/media\/1512"}],"wp:attachment":[{"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/media?parent=1494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/categories?post=1494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gpayments.com\/blog\/wp-json\/wp\/v2\/tags?post=1494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}