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How 3DS Affects Merchants and Consumers in the Americas

Blog post from Basis Theory

Post Details
Company
Date Published
Author
Basis Theory
Word Count
855
Company Posts That Month
6
Language
English
Hacker News Points
-
Post removed?
No
Summary

3D Secure (3DS) adds identity authentication to online card payments, helping reduce fraudulent card use and merchant chargeback exposure but potentially increasing checkout friction, confusion, and transaction failures. Although it is not generally mandatory for domestic U.S. or most American transactions, merchants serving Europe must use 3DS 2.0 to comply with PSD2, while the EU, UK, Australia, and India impose strong authentication requirements. Adoption in the Americas has been constrained by concerns about customer experience and conversion losses, with reported U.S. 3DS transaction failure rates of 29% compared with lower rates in high-adoption European markets, though the U.S. accounts for much of a rapidly growing global 3DS services market. Improvements in 3DS 2.0, rising fraud and data-breach risks, and the need to support international commerce are expected to drive wider adoption across the Americas, despite continuing merchant concerns over approval rates.

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