3D Secure (3DS) is the protocol behind the "Verified by Visa" and "Mastercard Identity Check" screens. Version 1.0 was clunky and hurt conversion rates. Version 2.0 is a game-changer.
Frictionless Flow vs. Challenge Flow
3DS 2.0 analyzes over 100 data points (device ID, location, spending history) to assess risk in the background. If the transaction is deemed low-risk, the user is authenticated without seeing any popup. This is called the Frictionless Flow.
Only high-risk transactions trigger the Challenge Flow, where the user must enter an OTP sent to their phone.
Liability Shift
The biggest benefit of 3DS is the liability shift. If a transaction is authenticated via 3DS and later turns out to be fraudulent, the liability shifts from the merchant (you) to the card issuer (the bank). This protects you from chargebacks.
Lumen Pay Implementation
Our SDK handles 3DS 2.0 automatically. We attempt the frictionless flow first. If the bank requests a challenge, we display a native modal within your checkout page—no redirects required. This ensures maximum security with minimal impact on conversion rates.