E-commerce fraud attack rates have declined 36% in the past 12 months, whilst 3DS transactions have grown more than 600% across the same period, led by uptake of the new 3DS 2.x protocol – according to a cyber security report.
The 3DS protocol aims to reduce instances of fraud in online card payments by more accurately determining transaction risk.
The updated 2.x protocol, currently being rolled out around the world, includes support for mobile payments and looks to reduce the friction along the customer journey associated with the original protocol.
3DS includes methods of two-factor authentication and is being more frequently introduced as part of the drive towards Strong Customer Authentication (SCA).
The 3DS protocol provides a secure framework to link the acquirer with the issuer in order to authenticate a cardholder during an ecommerce transaction.
It was updated in 2018 to include a mobile component and to further streamline the customer experience without compromising security.
The ability to attach historical context to a cardholder’s device, location, email address and online behaviour, even when they are interacting with 3DS 2.x for the first time, is critical for success.
The decline in attack rates comes amid continued digital adoption, with a 21% increase in e-commerce transactions over the last year, driven in part by a 182% growth in Buy Now, Pay Later transactions, as well as the huge shift towards ecommerce driven by the global pandemic.
The 9% decline in automated bot attacks seen across e-commerce is in sharp contrast to a significant rise in attacks against media (174%) and financial services (28%) businesses. LexisNexis Digital Identity Network detected 189 million bot attacks levelled against e-commerce, and a further 683 million against financial services and 351 million against the media industry in H1 2021.
“The results speak positively of the revised 3DS 2.x protocol and its impact on protecting consumers and businesses from fraud risk, made possible by our evolving regulatory environment,” comments Stephen Topliss, vice president of fraud and identity for LexisNexis Risk Solutions.
“The ability to more easily leverage a global network of online behaviour, locational data, device analysis and other inputs within the 3DS protocol means that issuing banks and merchants can more accurately identify both criminals and legitimate, trusted users.”
“Given the vast increase in ecommerce transactions during the government-imposed lockdowns of the last year, it could be predicted the industry would struggle to cope with fraudulent activity within this period. However, a reduction in attacks suggests 3DS 2.x is playing its part in reducing fraud, therefore safeguarding consumers and defending businesses.”
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