Until recently, there was no easy way to validate that a purchaser on an e-commerce website is indeed the legitimate cardholder. 3D Secure technology was launched to reduce the likelihood of online fraud, by authenticating the cardholder with the card issuer at the time the transaction takes place, thus significantly reducing cardholder disputes and merchant chargeback’s.

3D Secure requires the cardholder to register their card (on the card issuers website) answering a number of security questions. The cardholder then sets up a password and secret phrase which will be used by the card issuer for every online transaction. Once signed up the cardholder uses this personalised password for every online purchase on sites with 3D Secure integration.

This technology is designed to increase consumer confidence in using credit cards online – an issue that is key to commercial success on the internet. However, retailers need to be careful about its integration into a website as not all consumers are yet aware of the technology and therefore if handled incorrectly could actually increase the risk of shopping cart abandonment.

As there has been very little media coverage of the new 3D Secure technology, the average consumer is unaware of its uses, therefore there is work to be done for merchants in creating awareness and highlighting the benefits in order to prevent consumer confusion and shopping cart abandonment.

It may be advisable to add information within the buying process to explain and reassure consumers or perhaps have a link to a page that explains exactly what 3D Secure is and the benefits it presents for people buying products online.

Despite these teething issues, the introduction of this technology is an exciting one and will protect ecommerce merchants from online fraud plus increase consumer confidence in purchasing from sites with 3D secure integration.

3D Secure is predicted to become the industry standard by the end of 2008, providing online consumers with added confidence in sites utilising this technology. We have successfully integrated 3D Secure to e-commerce clients Toner Expert and Red Express, plus we are currently completing work on Jessops.com.