3D Secure (Three-Domain Secure) is a security protocol used to authenticate the identity of a cardholder during a Card-Not-Present (CNP) e-commerce transaction. It is branded differently by major card networks, most notably as "Visa Secure" (formerly Verified by Visa) and "Mastercard Identity Check."
How 3D Secure Works
When a customer attempts to check out, the 3DS protocol redirects them to their card-issuing bank's portal. The bank then challenges the customer to prove their identity, usually by sending a One-Time Password (OTP) via SMS, or by requiring biometric authentication (like FaceID) through the bank's mobile app.
The Liability Shift
For merchants, implementing 3D Secure is highly beneficial because it triggers a "liability shift." If a transaction is successfully authenticated via 3DS but later turns out to be fraudulent, the financial liability shifts from the merchant back to the card issuer. This protects the merchant's chargeback ratio and saves acquiring banks from absorbing fraud losses.
