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How is data promoting fraud reduction in digital commerce through the new EMV® 3-D Secure?

We are living in the age of data. You probably heard that data is the new oil or the new 21st-century currency for the digital era and according to ‘The Economist’ data is the world’s most valuable digital resource. Considering all of these ‘mantras’, one of the most important uses of data is to support companies to develop their business.

It doesn’t matter the role neither the industry, data has the potential to transform it. Companies are reinventing themselves by adapting systems, business, processes, and cultures with the whole purpose of exploring and address the opportunities presented by data. The questions that remain are 1) how to maximize the use of data to leverage your business? And 2) what is the quality of the information that is being sent out?

In the payment industry, one of the most recent and important use cases for data is supporting companies to detect fraud through authentication technologies. The ultimate goal is to achieve a perfect balance while pursuing a positive customer experience along with their shopping process, an accurate fraud detection strategy in order to minimize losses and increase efficiency minimizing operational costs.

In that scenario, EMV® 3-D Secure is going to play a very important role in fraud reduction through data exchange. One of the main improvements in EMV® 3DS framework is the amount of new data that is available, more precisely in EMV® 3DS we have 10x more data than 3DS 1.0. All of this data provides support for better decision making during the authentication process. In other words, richer data exchange enables less friction for cardholders and also touching bottom and top line problems for merchants and issuers.

In a study published by Visa leads to authentication frictionless (without challenge) up to 95% with the use of risk-based authentication mechanisms. In this situation is purely data being used to a smart decision process.

To achieve such potential, it’s important for Merchants, Acquirers, PSPs, and Issuers to do good use of that by interpreting and organizing it. EMV® 3-D Secure has more than 150 new data elements, however, only 40 data elements are required over the total. It’s up to the Merchants to determine either they share additional info or not.

UL can support both Merchant and Issuer by teaming up with their fraud/data departments to support them on how to explore the full potential of EMV® 3-D Secure.

…And what a good data strategy provides:

  • Reduce false-declines while minimizing fraud loss
  • Optimize customer experience
  • Increase Conversion
  • Optimal data exchange

Do you want to know more about 3DS Data Strategy? – Get in touch with a UL expert now.