Visa Takes Another Step Toward Ambient Authentication with PSD2-Compliant 3-D Secure Upgrade

Visa is enhancing 3-D Secure 2.0, the security system underpinning its Verified by Visa service for online payments, and the company says it will help to improve security while making transactions easier for consumers.

3DS 2.0 enhances security by leveraging 10 times more data for transaction verification, using contextual metrics like payment history, the kind of device being used, and the customer’s shipping address. For 95 percent of transactions, Visa says this additional data will be sufficient for cardholder and merchant verification, saving extra security measures like one-time passwords for the few high-risk transactions of the other five percent.

That means lower transaction times for customers, with Visa anticipating a reduction of 85 percent. And for merchants, it means an anticipated 70 percent reduction in cart abandonment. The system will also help to ensure that merchants are compliant with the European Union’s new PSD2 payments regulations.

It’s another small step toward the ‘ambient authentication’ to which Visa aspires – the idea that behavioral, contextual, and biometric data can eventually be used to authenticate customers without requiring any special actions on their part. And it’s also a reflection of the increasing use of mobile devices for purchases, with Visa’s 2016 Digital Payments Study having found that the number of Europeans using mobile devices to make payments increased from 18 percent in 2015 to 54 percent last year.

Visa says it expects early adoption of the upgraded 3DS 2.0 system to start in the second half of this year.