PROCESSING.COM What is 3D secure?
3D secure 2.0 may balance risk and security for iGaming operators, writes Matt Harrod, VP of Europe at
Processing.com.
T
Processing.com
Matt Harrod, VP of Europe,
Matt has almost 15 years’ experience in the payment and Fintech space, working for major European brands, including Lloyds Banking Group, Median and Ingenico. He has a wealth of experience in international business development, supporting clients in harnessing the power of payments to lay the foundations for strong business growth. An expert in the
gaming sector, Matt offers considerable insight into the impact of Europe’s uncertain political climate on iGaming operators in the region.
he payments industry is constantly evolving. The technologies underpinning payment processes on operators’ platforms are quicker and smoother than ever, giving customers an enjoyable, easy and convenient gaming experience. Reducing friction points in the customer experience is a key focus for operators competing for an increasingly disloyal customer base, however it is possible to be too frictionless. In the iGaming industry fraud continues to be a major problem. What’s more, when payment processes are too smooth, they can increase the chance of fraud taking place. It’s therefore essential for operators to ensure they have the right security in place.
A major issue being experienced in the iGaming industry is bonus abuse. Many operators are suffering as customers share documents used in the KYC process with fraudsters in exchange for money. The fraudster can then use the customer’s identity to reap the benefits of bonuses that the customer would otherwise receive. By doing this, bonus abusers can use the identity of many customers and collect winnings generated from these bonuses. As a result of this type of fraud, operators are cautious when it comes to bonus promotions with many reluctant to offer them. This can hinder a business’s ability to increase conversions using bonus promotions. It’s therefore important for operators to take security seriously.
WHAT IS 3D SECURE?
With newfound confidence,
operators may be more willing to offer bigger and better bonuses to customers
52 AUGUST 2019 CIO
In September this year, operators may gain the support they need when fighting instances of fraud, with the implementation of Strong Customer Authentication (SCA), a key part of which is the newly updated 3D Secure 2.0. The original version of the scheme, 3D secure 1.0, was brought into effect in 2001 and was designed to add an additional layer of security during the payment process. It requires customers paying for goods and services online to authenticate themselves at the point of payment. It works through a series of communications between issuers, acquirers and merchants. When an online purchase is made without 3D secure it is straight forward: the customer enters their card details online, the merchant passes this on to the acquiring bank, who then checks the information with the card issuer. Once the card issuer confirms that the information is correct, it pushes a message back to the start of the process confirming the payment. This process changes slightly with 3D secure 1.0. Before the payment details are even passed on to the acquirer, the merchant contacts a directory server which will confirm whether the card is signed up with 3D secure. If it is, the customer will be directed to a
webpage hosted by the issuer, where the they will be asked to authenticate themselves. Once this authentication takes place, the merchant will relay the card details on to the acquirer and the transaction will take place just like it did before 3D secure. The process can also be conditional, meaning that it doesn’t have to take place for every transaction made on a website. Instead, it can be used for high risk transactions and payments over a certain amount.
HOW THIS WILL CHANGE WITH 3D SECURE 2.0
3D secure 2.0 is being brought in to improve this process and reduce some of the friction it causes, and even to enhance the user experience for the new generation of mobile commerce (mCommerce) payments. This something that is particularly attractive to the gaming industry, due to the fact that most bets are now made via mobile phone.
Under the new update, 3D secure 2.0 will use more contextual data than the original version, meaning that payments can be authenticated with data such as, shipping locations, customer location and device information. This means, less challenged payments, less need for customers to authenticate themselves and less friction in the payment process. For iGaming operators, it will result in increased conversions and less customers being frustrated during the payment process, which ultimately leads to them looking elsewhere. The new changes also mean that 3D secure is adapting to the way that consumers are making payments in the digital era. 3D secure 2.0 is better suited for authenticating customers on mobile devices, a direct result of igamers increasingly using this medium to pay and to play.
What’s more if a payment is challenged, 3D secure
2.0 will allow customers to use biometric authentication rather than a password – as was the case with the previous version. Again, this is better suited for customers using mobile devices, who can quickly and With 3D secure 2.0, operators can provide smooth and secure payment services that can be accessed when the customer is mobile. Baring this in mind, adopting the new process is a great way for operators to gain trust from their customers and provide a smooth service.
REDUCING BONUS ABUSE AND WHAT THIS MEANS FOR THE INDUSTRY These new changes not only safeguard customers’ information but stand to significantly benefit operators too. The implementation of the scheme may pose huge benefits when it comes to reducing bonus abuse for example. The additional step required for
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