What is the 3-D Secure liability shift and how can you configure it in wallee?

3-D Secure authentication is a fraud prevention protocol that was created to prevent online card payment fraud. It is recognised by major debit and credit card issuers, including Visa (Verified by Visa), Mastercard (as Mastercard Secure Code) and American Express (as American Express SafeKey).

The use of 3-D Secure is required by the Strong Customer Authentication regulation in Europe.

How does 3-D Secure authentication works?

The 3-D Secure authentication adds an additional layer of protection through a secure password or one time PIN that customers enter on the 3-D Secure page to authenticate themselves.

The benefits of using 3-D secure

By using 3-D Secure, you protect both your business and your customers against card payment fraud.

In case of dispute payment (chargeback) or fraudulent transaction, that was successfully authenticated through 3-D Secure, the liability is shifted from you, the merchant, to the card issuer. However, please note that there are still some cases where the customer could win the dispute (service not rendered or fraud). There is no 100 % gurantee that for payment with 3DS the money will never be charged back.

Liability shift also applies if the card or issuer isn’t enrolled in 3-D Secure but the card scheme supports 3-D Secure. In this case the customer is not prompted to authenticate through 3-D Secure but the liability still shifts to the card issuer.

Recurring transactions are not covered by the liability shift.

How to configure 3-D Secure in wallee?

You can configure a different 3-D Secure / liability shift behaviour for each of your connectors.

You can choose to enable 3-D Secure or not. You can also choose to enforce 3-Secure and in this case abort transactions that fail the 3-D Secure authentication.

Transactions without liability shift can either be marked as suitable and to be manually checked.

Wallee also allows to configure additional conditions to control when 3-D Secure should apply.
For example, you can enable 3-D Secure based on the transaction amount, the billing or shipping country, the currency etc... You can also disable 3-D Secure for returning customers. This way you dynamically route transactions to process with or without 3-D Secure based on the fraud assessment.

This simply requires to organize a contract with your payment processor that enforces 3-D Secure and a contract without 3-D Secure and to activate separate connector configurations in wallee.