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Visa Reports EMV 3DS Delivers 35% Less Fraud

Visa Reports EMV 3DS Delivers 35% Less Fraud
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When consumers rushed to shop online at the start of the pandemic, scammers weren’t far behind. In particular, the exponential growth of e-commerce and related digital transactions such as curbside pickup and grocery delivery has led to a similar explosion of non-card (CNP) fraud.

The problem is that as issuers have moved to get rid of this scam, they’ve also caused a lot of fake dips – meaning that good customers have been banned due to growing fears of fraud.

“In this kind of challenging environment, merchants are really looking for a solution that can help them improve the authorization rate while also reducing fraud,” Yueming Wang, Visa’s North America Risk Products Manager, told PYMNTS.

Enable real-time data collaboration

Merchants have discovered that the latest “Three Domain Server,” or EMV 3-D Secure (3DS) authentication, is a particularly effective tool. As a result, Visa has seen more than two billion EMV 3DS authentication transactions globally since the beginning of 2021.

The 3DS system collects the elements of a digital identity that a consumer has when making online transactions, as well as more information about that payment process. This information then enhances the degrees of risk in the transactions. When a transaction is determined to be low risk, the consumer is not required to provide any additional information. For high-risk transactions, smooth steps are taken for additional verification to prevent third-party fraud.

“3DS technology enables real-time data collaboration between merchants and exporters,” Wang said. “Using this information, we can get a common understanding of the consumer.”

reduce fraud by 35%

For example, when a shopper makes transactions on a website for the first time, that merchant does not have any additional information about the shopper. In this case, 3DS providers like CardinalCommerce, a Visa solution, processes billions of authentication requests globally from all networks, and uses artificial intelligence (AI) and machine learning (ML) algorithms to provide actionable insights to both the merchant and the issuer.

“If a device is suddenly treated abnormally, and we see a spike in activity, Cardinal is able to identify that as an anomaly. [can] Send this information to the issuer so they know what to do with it,” Wang said. “The issuer can decide to require the consumer to do additional verification — or, in highly suspected fraud cases, simply decline the transaction.”

As a result, in the US, EMV 3DS transactions have 35% lower fraud rates than other forms of e-commerce transactions, she noted.

Offer higher approval rates

In other parts of the world, regulation has helped the adoption and expansion of the 3DS. In the US, it has been driven by the value of the product and what it offers stakeholders.

“It’s a simple, secure, and seamless way to do authentication for merchants,” Wang said. “We see that for EMV 3DS transactions, there is an average of 110 basis points for approval raise compared to unauthenticated e-commerce transactions, which is huge.”

Create simple and simplified experiences

In 2022, Visa will continue to work closely with merchants, issuers and partners to enhance the process of sharing data and providing insights. With merchants, the company will continue to explore more optimal ways for merchants to capture and share data. With issuers, Visa will focus on best practices to leverage all data issuers it receives, leverage them to create seamless experiences and reduce false rejections.

“The more we can do to create these simple, streamlined experiences by partnering collaboratively across the ecosystem, the more successful we will be in eliminating fraud and creating superior consumer shopping experiences,” said Wang. “At the end of the day, that definitely matters.”


New PYMNTS data: Documenting Identities in the Digital Economy – December 2021

on:More than half of American consumers believe biometric authentication methods are faster, more convenient, and trustworthy than passwords or PINs – so why do less than 10% use them? PYMNTS, in collaboration with Mitek, surveyed more than 2,200 consumers to better define this perception versus the usage gap and identify ways companies can boost usage.

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