When 3D Secure (3DS), an extra layer of authentication employed on some e-commerce transactions that asked shoppers to enter a password, was introduced in the early 2000s as a way to protect merchants and consumers from fraud, adoption lagged—especially in the U.S. Merchants simply objected to the extra friction that was hurting conversion. Many jurisdictions in international markets began mandating 3DS, so adoption there significantly outpaced the U.S.
As the second iteration of 3DS (3DS2), which only challenges transactions when certain risk thresholds are exceeded, rolls out, adoption patterns are different, according to analysis by antifraud technology provider Ravelin.
Ravelin found 68 percent of transactions in the U.S. now use 3DS2 with a 99 percent authentication success rate, compared to seven percent of transactions in the U.K. with a 55 percent authentication success rate.
“3DS2 is a vast improvement over 3DS1 in terms of smoothing out the payment experience,” said Martin Sweeney, CEO of Ravelin, “but our data shows that merchants in many different countries still have a long way to go to adopt 3DS2—especially merchants in the U.K.”
While some European countries have high 3DS2 adoption rates—especially the Nordics and Eastern Europe—other countries like Spain (4 percent of transactions), Ireland (5 percent) and the Netherlands (14 percent) are playing catch up.