We witness a rise in the requirement of Strong Customer Authentication SCA. This is the current scenario with PSD2. We can clearly understand why and how the world of payments is concerned about the issue of authentication which is basically to meet the new regulations and the requirements.
Strong Customer Authentication needs businesses to make use of two independent elements of authentication which can apparently verify payments.
It is important that we properly discuss and elucidate the value of authentication.
You need to understand that it is 3-D Secure (3DS) which is the primary mechanism for authenticating cardholders all across the globe. However, for merchants, it can be viewed as additional friction to the shopper experience, which can be problematic.
To deal with this issue, the next generation of 3d Secure Version 2 or 3DS2 has been introduced. Basically, the new 3D secure version 2 allows for frictionless flow in the shopping experience of the consumers or customers and also allows for a dynamic range of shopper-friendly authentication flow where an authentication challenge is required. In this article, we shall be looking into some of the major benefits of 3d Secure Version 2.
Better Risk Assessment with more data-
3D-Secure version 2 enables the merchant to send more data to the respective issuers, which is done with every single transaction made. The data can be utilized by the issuers to conduct a more informed assessment of the respective transaction. This enables the issuer to determine the legitimacy of the cardholder.
In a sense, it can help prevent and reduce fraud cases related to the use of cards. When the issuer is quite sure that the transaction does not pose much risk, then they can authenticate and surely authenticate it without much further input from the shopper, thus, making the process more resolute and easy. This process is basically known as a frictionless flow. This makes the journey and the experience of the shopper quite seamless.
In case of transactions that are high risk, the issuer can make use of some authentic shopper-friendly means to authenticate the card-holder. Biometrics is one such example. In this case, the shopping flow or process is referred to as a challenging flow. So more data and better evaluation results in a reduction of fraud. This is absolutely important.
Enhanced OTP or One Time Password:
Issuers primarily used the OTP system for authentication. Issuers will send the OTP to the registered (to the card) mobile number or the device. The shopper will basically receive the OTP in the form of a text message. The OTP has to be entered as a password, with which the shopping is continued. With the use of 3d Secure Version 2, the OTP system is enhanced.
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