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Outseer Unveils Global Research into 3D Secure Adoption and Usage

Payment authentication and monitoring solutions provider Outseer has released new global research conducted by the Aite-Novarica Group focused on 3D Secure, the payments authentication standard developed and managed by EMVco. Aite-Novarica found that the 3D Secure standard is now widely deployed by card issuers and merchants globally and is being used as a key technology to fight card-not-present (CNP) payment fraud.

CNP fraud, including purchases made via mobile apps and devices, accounts for more than half of all gross fraud losses. According to the research, total global CNP fraud losses will eclipse $17.2 billion by 2023, while global eCommerce spending is expected to grow to $5.9 trillion during the same period.

The Aite-Novarica Group research provides insights into both issuer and merchant attitudes toward the usage of 3D Secure as a technology for fighting CNP fraud. Key findings from the study include:

  • Card issuers, issuer processors, and merchants are actively using 3-D Secure: 100% of card issuers and issuer processors interviewed in the study are currently using 3D Secure, while 69% of merchants said they are currently using the standard. Most issuers report that their 3D Secure transaction volumes are increasing, primarily due to the growth in CNP payment volume.  Increasing adoption is also driven by Strong Customer Authentication (SCA) mandates, as 3D Secure can be used to help meet PSD2’s SCA regulation requirements.
  • 3D Secure is helping businesses fight fraud: Nearly two-thirds (65%) of issuers and issuer processors interviewed said that 3D Secure is ‘as effective’ or ‘more effective’ for fraud detection compared to other anti-fraud solutions. This figure rises to 100% of issuers in regions such as Europe and parts of Asia Pacific, where SCA mandates have helped accelerate adoption and 3D Secure is used for the majority of CNP transactions.
  • Merchants achieve higher authorisation rates when transactions go through 3D Secure: Driving up transaction authorisation rates is a key goal for merchants and issuers to grow their business. In the research, Aite-Novarica found that when 3D Secure is used to protect CNP payments, more merchants achieve higher authorisation rates versus those that do not go through 3D Secure:

Table 1: Percentage of merchants achieving 85%+ authorisation rates

Region Not using 3D Secure Using 3D Secure
North America 53% 62%
Europe 41% 77%
Asia Pacific 45% 66%


“One of the clear take-aways from this study is when you have both sides of the equation, both the issuers and merchants equitably participating in 3D Secure it’s a great experience for everybody,” said Julie Conroy, Head of Risk Insights & Advisory at the Aite-Novarica Group. “Take Europe as an example, where you have the majority of your CNP volume going through 3D Secure, overall net fraud is down, net 3D Secure fraud rates are even lower and customer attrition is lower.”

A key recommendation from the study highlights the importance of collaboration via 3D Secure.

“When the full spectrum of transactions are sent through 3D Secure, all parties benefit from greater precision detection and the improved ability to distinguish genuine from fraudulent users,” said Jim Ducharme, COO at Outseer. “This translates into higher authorisation rates, frictionless shopping experience, increased revenue, and greater overall profit potential.”

Additional insights from the research include:

  • Global CNP fraud losses grew 29% year-on-year from 2019 to 2020
  • 100% of the issuers and issuer processors interviewed said they will have the ability to support the latest version of the 3D Secure protocol (3D Secure 2.0) by the end of 2021
  • 79% of merchants who currently use 3D Secure said they expect to increase usage over the next two years, citing increasing CNP transaction volumes (80%) and rising CNP fraud attacks (70%)
  • Of the 31% of merchants not using 3D Secure today, two-thirds overall, and 73% of those in unregulated countries, cite plans to support 3-D Secure within 12 months