Online fraud is a real risk to your business. Find out how you can reduce your risk with 3-D Secure.

With so much publicity about online fraud, everyone’s focused on making online transactions safer. 3-D Secure is designed to do just that by authenticating a cardholder’s identity with their bank right at the online checkout.

How does it work?

Using merchant plug-in (MPI) software installed on your web server or the hosted services of your payment gateway, 3-D Secure works with Visa and MasterCard’s authentication services, Visa Secure and MasterCard® SecureCode™ to provide transaction information to the card issuer.

If a transaction is determined to be high risk, an authentication page hosted by the card issuer will appear within your website’s payment page.

3-D Secure-enrolled cardholders use a specific password or phrase for authentication with their card issuer. The issuer can also link the authentication process with the cardholders' SMS security for internet banking. The cardholder simply types in their password or SMS authentication to verify their identity.

If the check fails you should halt the transaction as this is a strong indicator of potential fraud.

Not all transactions will need a verification check. In fact, depending on your business type, most will pass through without a challenge.

What are the benefits of using 3-D Secure?

Reduce fraud and chargebacks

Identify cardholders at the time of purchase, significantly reducing the number of disputes and fraudulent payments.

Shift the balance

3-D Secure will generally make the issuer responsible for the chargeback liability on fraudulent transactions; merchants remain liable for chargebacks related to goods and services, for example if the goods are not received.

Increase customer confidence

The added security will give cardholders greater confidence when shopping online.

Manage your risk

While the use of 3-D Secure authentication will generally make the card issuer responsible for the chargeback risk on fraudulent transactions, it’s not a substitute for your own risk management. Stay vigilant when it comes to high risk or suspicious sales and remember to cancel and refund any order that seems suspicious

Currently, 3-D Secure authentication is optional but Visa and MasterCard will soon require a range of business types to use Visa Secure and MasterCard SecureCode for their transactions.

3-D Secure for NAB Transact merchants

If you use the NAB Transact payment gateway, you’ll have the added comfort of knowing that NAB Transact supports 3D-Secure. You can consult your web developer or e-commerce software provider to have your integration with NAB Transact upgraded to use 3-D Secure authentication.

The following NAB accredited payment gateways provide support for 3-D Secure:

  • Advam
  • Card Access Services
  • CyberSource
  • DPS Payment Express
  • eWay
  • Merchant Warrior
  • PayPal Payflow
  • SecurePay

This article was originally published in Talking Shop Winter 2013.

Want to learn how the industry is tackling other types of online fraud. Read the recently published card not present fraud industry framework.

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NAB eCommerce Merchant Account

Combine your gateway provider with a NAB eCommerce Merchant Account, so your transactions are submitted to us for quick authorisation and settlement.


  • Overnight settlement to a NAB Business Transaction Account
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NAB Transact

Secure and convenient card payments when your customers aren't present with you – includes online, phone, mail orders and payments. You can also view all your payments in one place.


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Talking shop

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