3D Secure v1: what are the limitations of this version?
With 3DS1, when authentication is activated, the buyer is redirected to a page managed by their issuing bank in order to authenticate him or herself using the bank’s identification system (via SMS code, calculator, etc.).
This first version of 3D Secure, designed by Visa and Mastercard in 2002, was the first step towards securing e-commerce transactions. It has been in use on most commercial websites since 2008.
In most cases, the merchant can benefit from a liability shift when 3D Secure authentication is successful. In case of a transaction dispute, the buyer’s bank covers the chargeback costs. The liability shift is raised in the Expert Back Office.
However, 3D Secure authentication requires a break in the purchase process and sometimes results in payment cancellations.
For these reasons, some merchants would choose to disable 3D Secure, with the agreement of their bank.