What is most likely a preview of things to come for the U.S. market, Visa is announcing the launch of 3-D Secure, Version 2 in Europe. As reported in Finextra, the details of what 3-D Secure V2 is all about will be widely available in first quarter of 2017 and launched in 2018, with pilots to occur in between:
As EMVCo prepares to unveil a major update to the 3-D Secure specification for authenticating online transactions, Visa says that it expects to set a migration deadline for European merchants of April 2018.
As a refresher, here’s what 3-D Secure is all about:
3-D Secure is a messaging protocol used by the payments industry, under the Verified by Visa and MasterCard SecureCode banners, to enable consumers to authenticate themselves with their card issuers when making online purchases through PC web browsers.
What is new in V2 is the protocol with be available for mobile and work for in-app transactions. What is also new and perhaps more important, is that the new version will have merchants include more data beyond transaction information in the authorization stream. This will allow issuers to make a more informed decision when validating the user. And the good news; it doesn’t require the user to enter a password. (The password requirement created adoption issues and cart abandonment in the current version.)
The April 2018 launch date is about, you guessed it, a liability shift for merchants in Europe. No news on dates for other regions, but the impact of V2 to curtail on-line and mobile fraud is one to watch:
“….the card giant says that to make sure stakeholders have time to implement new products and services, it will hold off on certain rules – such as fraud chargeback protection on merchant-attempted 3-D Secure 2.0 transactions – until the programme activation date.”
“Activation dates will vary between regions. In Europe, where risk-based authentication is already heavily in play, activation is likely to be April 2018, but the plan for other markets has not yet been decided.”
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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