Blog / 3DS

Optimizing your 3DS strategy to benefit customer satisfaction

Optimizing transactions is top of mind for merchants, with 3DS seemingly falling out of favor. But the two aren’t mutually exclusive. 3DS is still your best bet when it comes to stopping fraud – you just have to be strategic in how you use it.

20 November 2023

Optimizing your 3DS strategy to benefit customer satisfaction

The introduction of PSD2 in the EU saw the widespread adoption of 3D Secure (3DS) to meet strong customer authentication (SCA) requirements – together with the friction it introduces to the customer journey. It’s true that recently, many merchants have started looking towards alternatives in a bid to optimize their payment processes and keep customers happy.

But 3DS isn’t the issue here, and treating it as such could be detrimental to your fraud prevention. The real focus should be on optimizing your use of 3DS to keep good customers happy and fraudsters at bay. Let’s see how.

Protection vs friction

Balancing fraud risks and friction is probably the fraud team's biggest battle. In fact, over 90% of merchants are worried about what 3DS means for conversion. Almost a quarter of those, 23%, say that they are “very concerned” about potential churn.

However, 3DS needn’t – and shouldn't – be the conversion killer some take it for. It can be beneficial to merchants, for reasons beyond mere compliance. 3DS is still a fantastic tool to fight fraud, which can lead to chargebacks and damage your relationship with issuer banks. Plus, where it applies, the liability shift it introduces can be a valuable protection for merchants worried about their chargeback rates.

This is where transaction optimization and exemptions come into play. It’s not about payments lost to challenges, but about payments lost to unnecessary challenges. Let’s look more closely at how you can optimize your 3DS strategy.

Use your data to make informed decisions about 3DS.


3DS and CX can work together

Customer experience should be the top priority for any ecommerce business. The amount of effort it takes a customer to buy from you has a huge impact on revenue.

In fact, 52% of consumers will switch to a merchant with less friction in the shopping experience, when given a chance to. As a result, more businesses are looking towards transaction optimization to create a smoother customer experience.

But that doesn’t mean 3DS should get chucked out. The best route forward is to use the information you have about a customer in order to make informed decisions.

Split traffic across different authorization routes to get the best outcome for your customers and your business. Your aim should be to deliver a low-friction check-out experience where safe but trigger a 3DS check to avoid blocking suspicious transactions that could still be legitimate.

Splitting traffic across different authorization routes, based on customer data, is ideal.


3DS ensures that consumers are better protected. But sending all orders through 3DS would be bad for business. So would choosing to forgo 3DS altogether.

What you want to do is use everything you know about each customer to automate informed choices on which payments can go through without 3DS and where a little friction is the optimal solution, to protect your bottom line.

This means taking the data that your systems capture, collating, enriching and analyzing it, and using it to decide whether each transaction should be subject to 3DS, can be exempt, or is an obvious red flag and should be blocked right away.

How you manage these thresholds ultimately depends on your risk appetite, your consumer demographics and a series of secondary factors. Taking the time to think about the fraud landscape in your niche as well as your typical customer profiles will ultimately help optimize your strategy towards 3DS, finding a balance best suited for your needs and wants.


Next steps

In all, how and when you use 3DS is dependent on your business. What you’ll want to do is to put in place different authorization routes and automate their selection. Each of these will split the traffic according to the available data about each shopper, ensuring that known good customers get the most frictionless experience – and that any choice to funnel to 3DS authorization is aligned with your risk appetite.

Figure out what your options are with your PSPs. Analyze and segment your historic transactions to fully understand your potential for exemptions. Test different authorization routes and measure the success of each.

Using specialized solutions such as Ravelin’s will allow you to do all of the above as well as take full advantage of more advanced techniques such as automation and machine learning to fine-tune the process. As a result, you can combine the advantages of using 3DS and protection from transaction fraud with providing as seamless an experience to your customers as is possible (and safe) for your business.

To find out more about how we can help optimize your 3DS strategy and fuel your growth, have a chat with a Ravelin fraud expert.





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