PARIS | This week Ogone presented the results of their latest 3D Secure barometer - a comprehensive analysis of Ogone's processing data on the status of 3D secure adoption by merchants across several European countries. The latest Ogone 3D Secure barometer covers March 2014 and 7 European countries: France, Germany, the United Kingdom, Belgium, the Netherlands, Spain and Switzerland.
Context: what is 3D-Secure?
3D-Secure is the common name for the anti-fraud and chargeback solutions by the card schemes MasterCard, Visa, Diners & Discover, American Express and JCB. All solutions aim to identify the legitimate cardholder, in real-time, at the moment of online purchase. In addition to the credit card number and the last three digits of the security code, the user must enter a password, such as date of birth (simple authentication) or a dynamic single-use code (strong authentication). This password is verified instantly by the card issuer. 3D-Secure prevents fraudulent use of cards online and protects the merchant from costly fraud-related chargebacks (the card owner reclaiming the money in case of fraud).
MasterCard SecureCode and Verified by Visa are probably the best known 3D-Secure solutions. Discover's Protectbuy, American Express' SafeKey and J-Secure by JCB are less known. Regardless the solution, 3D-Secure offers merchants protection of their card sales, however, is also known to drive down conversion rates if consumers are not able to enter the right password (reasons for abandonment: forgotten password, code-generator not at hand, 3D-secure pop up screen not optimised for mobile checkout, or scares consumers suspecting 'phishing').
3D-Secure Adoption in France
In France, nearly 50% of the ecommerce merchants have adopted the 3D Secure authentication process, however only 19.4% of card payments are made using the 3D-Secure protocol. Interesting to see is that, over the last year, the adoption of 3D-Secure has decreased by 2.1 points. Based upon the forgoing, one may assume that more and more French merchants use the 3D Secure solution selectively. For example, merchants only 'challenge' their online shoppers to provide their 3D Secure passcode when buying for the first time or for large transaction values. French retailers and online businesses are more likely to seek the best balance between user experience of their online shoppers and their exposure to fraud and chargebacks.
France differs from its European neighbours
Ogone's study, covering more than 10 million transactions, reveals large differences between countries. While most card payments go through the 3D Secure authentication process in the United Kingdom (52.5%), the Netherlands (60.1%), Belgium (81.8%) and Switzerland (74.6%), online shoppers from other countries are less often to use their 3D-Secure password or code. This is the case of France (19.4%), Germany (28%) and Spain (16.6%).
Ogone's Flex3DS: 3D Secure optimised for protection and conversion
The Ogone Flex3DS solution enables merchants to secure card sales and maximise conversion rates by selective usage of 3D-Secure. The Flex3DS tool allows the merchant to set the criteria that determine whether or not the cardholder needs to confirm payment by using his or her 3D-Secure password. The criteria that merchants are able to set include the origin of the card, the shopping cart value and sales channel (desktop, tablet, mobile).
'meet the challenge of securing online payments'
"This fifth 3D Secure barometer helps Ogone to better understand and respond to the problems of ecommerce merchants accepting debit and credit cards. By deploying our Flex3DS solution in France and other European countries, we help our customers and prospects to meet the challenge of securing online payments while increasing their conversion rates ", Simon-Pierre of Seigliere Director analysis Southern Europe Ogone.
Ogone's 3D- Secure Barometer Methodology
The study was conducted on a total of 10,567,005 transactions between March 15, 2014 and March 31, 2014 with 50,000 merchants processing via Ogone. It analyzes the adoption of 3-D Secure in 7 European markets (France, Germany, UK, Belgium, Netherlands, Spain and Switzerland) by several indicators.
Sourced from Ogone, May 13th, 2014