Should you use 3DS authentication or not?

Let’s face it, your company spends a lot of money to acquire its customers. It can be through eye-catching ads, a beautifully addictive product, or viral design, but it costs your company mountains of energy and money to acquire every customer that lands on your site.

Your marketing department will optimize the size of the “buy button” down to the pixel and make sure that the colors you use have been A/B tested to perfection.

Your users will take one look at the work of art you and your entire company have built and will not be able to resist the urge to use your product and fork over the money necessary to do it. They will provide their payment details and click on your checkout button. It’s at this point that your painstakingly acquired customer is redirected to a page served by their bank, which is not even optimized for mobile.

After focusing on the small box presented, it was noted that a code had been sent via SMS, which now needed to be entered into this box. The user then switched apps to their SMS application, noted the code "487293", returned to your site to type in the first three digits, forgot the remainder, swapped back to the SMS application to review the code, and then switched back to complete the code entry on your site. Upon clicking 'proceed,' they were directed to a page indicating an error had been made in the code entry.

This is the current state of payments online - sites are investing millions on improving conversion rates throughout the customer flows just to throw all of that money out at the last step. This is why we never recommend our merchants push 3DS for all transactions. It’s essential to apply dynamic 3DS and only push 3DS to the riskiest transactions - this will allow your safer customers to finish their checkout process uninterrupted.

Typically we have seen that it’s only necessary to push 3DS authentication to less than 8% of your traffic which will lower the impact on your conversion rates by more than 90%.

So what do you need to get started? Only two things:

• Integration with a highly precise fraud prevention platform, you need to make sure that the company choosing who is risky and who is safe is the best out there. Anything else can cost you a lot of money and headaches in the form of fraud and chargebacks.
• Integration with a versatile 3DS provider capable of working with all the issuing banks used by your customers.

At Mangopay, we provide both of these services bundled in one to make it as easy as possible for merchants to implement the most efficient 3DS authentication strategy.

We have also built the tools necessary to comply with the regulations of each issuing bank you are using—so we make sure to comply with those banks that make 3DS authentication obligatory.