How does 3-D Secure work?
Before authorization, the merchant’s provider sends authentication data through the card scheme to the issuer. EMVCo describes EMV 3-D Secure as an e-commerce fraud prevention protocol that enables consumer authentication for card-not-present purchases, using information about the transaction, payment method and device. The issuer either approves the authentication without interaction or challenges the cardholder. The result travels with the authorization request.
Why does 3-D Secure matter for approval rate and chargebacks?
It cuts both ways. Authenticated payments give the issuer more confidence and, in many cases, move fraud liability away from the merchant. But every challenge is a step where customers can fail or give up. As an illustrative example: of 10,000 card payments sent to 3-D Secure, 7,000 pass frictionlessly, 3,000 are challenged and 600 of those are abandoned. Authentication completion is 94%, and the 600 abandoned payments should be tracked separately from issuer declines, or the acquirer gets blamed for a checkout problem.
When must a payment use 3-D Secure?
Where strong customer authentication is required, such as most online card payments in the European Economic Area under PSD2, unless an exemption applies. Issuers outside those rules can also ask for it. Adyen’s help centre describes the Authentication required refusal as the issuer mandating strong customer authentication and treats it as a soft decline, which is resolved by retrying with 3-D Secure.
Where does Omno use it?
3-D Secure is performed by the connected PSP. Omno’s hosted checkout handles the authentication step inside the same flow, statuses such as PENDING_3DS resolve later by webhook, and routing and cascading keep the authentication state consistent when a payment moves between providers.