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Overview of 3D Secure Authentication

3D Secure (3DS) is an additional layer of security for online card transactions, requiring the cardholder to authenticate their payment, typically through a password, one-time code, or biometric verification. It is widely used in regions with stringent payment security regulations, such as:

  • The European Economic Area (EEA) under PSD2 regulations.
  • India, where the Reserve Bank of India mandates 3DS for all online card transactions.

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Importance of Supporting 3D Secure

Supporting 3DS is crucial for businesses that operate in regions where it is mandated or preferred. Proper implementation reduces fraud, ensures compliance with regional regulations, and builds trust with customers. Without 3DS support, merchants risk failed payments and customer dissatisfaction.

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How 3D Secure Impacts Recurring Payments

3D Secure behaves differently for recurring payments compared to one-off transactions. The first payment in a subscription typically requires 3DS authentication. Once this initial payment is authorized, subsequent recurring transactions may bypass 3DS, but this depends on the card issuer and the specifics of the transaction.

However, improper implementation of 3DS can lead to challenges. For example, errors such as transaction_not_allowed often indicate that 3DS authentication is required for a recurring payment. In such cases, the payment cannot be completed unless the customer manually re-authenticates. If these issues are not addressed promptly, they can result in payment failures and, ultimately, involuntary churn.

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What Can Be Done?

Customer Communication

Retrying such payments as a merchant is rarely successful since 3DS errors typically require customer interaction. The best approach is to contact affected customers and guide them through re-authenticating their payments.

How Slicker Helps

Slicker provides tools to manage 3DS-related issues effectively:

  • Error Breakdown: Slicker categorizes and lists all 3DS-related payment errors in the Failing Subscription tab. This helps you identify which customers need to be contacted.
  • Tailored Messaging: By understanding the specific error, you can send personalized messages to customers, making the resolution process more effective.
  • Auditing Suggestions: If many 3DS-related errors occur, it might indicate issues with your 3DS implementation or that of your billing provider. Auditing the setup can help resolve systemic problems.

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Conclusion

3D Secure authentication is a critical component of modern payment systems, especially in regions like India and the EEA where it is mandated. While it adds security, improper handling can lead to spikes in errors and failed payments. With Slicker’s insights and tools, you can address these issues proactively, ensuring smoother transactions and improved customer experience.