3D Secure (3DS) is a standard method for authenticating electronic card transactions, offering protection against fraud chargebacks. When enabled, customers may need to verify their authorization through additional information for online purchases or by using chip cards for in-person transactions, reducing the business's fraud liability.
How does Square 3DS work
For most customers, 3D Secure won't affect their transaction visibly unless it's flagged as risky by their bank. If triggered, Square sellers might see:
A one-time passcode sent via text or email.
A request for biometric scan.
Redirection to the card-issuing bank.
Note: The visual experience during 3D Secure verification is determined by the card issuer. Square can't control this. If customers face issues, they should contact their card issuer.
How to enable Square 3DS
To activate 3D Secure on your Square payments, follow these simple steps:
Navigate to Payments > Risk Manager on your online Square Dashboard.
Click on Rules.
Select Create rule.
If prompted with a banner to update your APIs for enabling 3D Secure rules, refer to Square's developer documentation page for assistance.
Under Select action, configure your rule to Require 3D Secure. From there, specify the location where the rule will be applied and the conditions under which it will take effect.
Your specified criteria will trigger the requirement for 3D Secure verification upon payment.
Note: Payments initiated by sellers, such as in-person transactions, manually entered transactions, or mail-order/telephone orders, will not undergo 3D Secure verification.
Benefits and Risks
Before integrating 3D Secure, it's crucial to ensure it aligns with your business needs. Below are some benefits and risks to consider:
Benefits of using 3D Secure include:
Enhanced Fraud Protection: With 3D Secure enabled, fraudsters face greater challenges in making unauthorized payments, as additional verification steps are required.
Fraud Chargeback Protection: Sellers are not held responsible for fraud disputes on 3D Secure verified payments. However, non-fraud disputes may still incur liability.
Risks associated with 3D Secure include:
Possible Decreased Payment Completions: This depends on how the card issuer has designed their 3D Secure verification experience.
Increased Issuer Declines: There is the added possibility that card issuers may decline attempted payments they deem to be risky.
Square's Risk Manager provides various tools to manage risk, including rule creation, blocking, allowing, and alerts. 3DS is offered as an optional addition to bolster fraud protection measures.