Voice of the Industry

3DS management as an integral part of payment orchestration – how to increase acceptance without adding costs

Wednesday 2 November 2022 12:46 CET | Editor: Raluca Constantinescu | Voice of the industry

Authorising credit card transactions with 3DS has become integral to the credit card payment flow. Sunil Jhamb, CEO of WLPayments, gives some key points on why 3DS authorisation needs to be part of the payment orchestration functionalities.


In recent years, there has been a huge increase in the use and advertisement of payment orchestration solutions. In many cases, the term payment orchestration gets blurred and loses its intrinsic value. In essence, an intelligent payment orchestration solution should take care of the whole transaction journey, from the payment initiation and authorisation to its reconciliation process for online merchants. 

An intelligent payment orchestration platform adds tremendous value to online merchants, especially those operating across multiple geos, such as: 

  • enhancing the customer experience while increasing the success rate 

  • aggregating multiple payment methods, PSPs, and acquirers in a single integration 

  • lowering the cost and mitigating the fraud. 

In addition, merchants need strong partners to help manage regulatory changes in the payment space. This article explains why payment orchestration platforms need integrated solutions to handle multi-factor authentication, the requirement of the 3DS protocol. 

How did SCA and 3DS come into play with payments? 

Strong Customer Authentication (SCA) is a PSD2 requirement for payment service providers within the European Economic Area (EEA). It requires multi-factor authentication for online payments, increasing security and reducing fraud in CNP transactions. 

Card schemes have employed the 3DS protocol for many years to prevent fraud in online credit card payments. With 3DS and especially the 3DS 2.0 and higher versions, online payment transactions are performed following the SCA guidelines. 

With the recent 3DS1 sunset, the use of 3DS2 is mandatory almost worldwide. As many acquirers and issuers are still getting ready for this change, merchants face a significant risk of increased declined transactions. 

Usually, extra security means more restrictions one way or the other. On one side, customers expect strong data protection and privacy when paying online. On the other side, shoppers also want a convenient checkout process with only a few steps required to complete the payment. The great news is that nowadays, the advancements in payment technology enable merchants to enhance security while reducing friction for customers. For example, 3DS2 supports frictionless payments while not compromising data security. 

The 3DS 2.2 allows merchants to have higher chances of qualifying as eligible for SCA exemptions, offering a frictionless payment experience. 


How does payment orchestration help handle 3DS transactions? 

Transaction routing is a well-known and accepted feature of payment orchestration platforms. With different 3DS protocols available, routing capabilities should be extended to the authentication process of a transaction. Adding to the complexity is that each bank may have a slightly different exemption appetite or level of 3D Secure-readiness or interpretation of scheme rules. 

The 3DS Routing feature routes the transactions to the most efficient authentication protocol, taking exemptions and other valuable information into account. The authentication engine continues to optimise for the best 3DS version between 2.1.0 and 2.2.0. And for regular customers with a small likelihood of chargebacks, merchants can route the transactions to no 3DS. 

Exemptions: a fine line between less friction and less fraud 

SCA exemptions are defined based on the level of risk, transaction amount, recurrence, and the payment channel used to execute the payment. By using the provision of 3DS2 exemptions, merchants can reduce the number of times they are required to authenticate a cardholder, which essentially reduces friction at the checkout and immensely lowers the customer-dropout rate. Payment orchestration platforms must be completely agnostic, adapting transaction routing as required to ensure maximum success. 

Payment orchestration data helps configure and implement 3DS strategies 

3DS Routing also allows merchants to decide and implement their own 3DS strategy. Namely, merchants can choose which transactions they want to pass on to 3DS2.1, 3DS2.0, or no 3DS. This way, merchants can determine their 3DS approach, as they know their customers best. Besides, if a merchant is entering a new market, 3DS Routing enables them to conduct A/B testing for 3DS authentication. Thus, the merchant can also configure certain authentication rules specific to their business needs. 

Furthermore, with access to insightful dashboards and comprehensive data reports, merchants can check performance according to chosen parameters – 3DS version, issuing bank, country, payment method, device, and more. Using this data, merchants can adjust their strategy, optimise conversion, and create seamless customer payment journeys. 


Save fees by using Flex 3DS solutions 

Another payment orchestration innovation is Flex 3DS – a payment authentication solution implemented on a gateway level. Transactions are checked, taking into account exemptions while supporting 3DS2 versions. Flex 3DS saves merchants the cost of high 3DS acquirer fees and regular transaction fees when the transactions are declined due to 3DS authentication. At the same time, Flex 3DS provides a frictionless checkout experience for customers and simultaneously ensures PSD2 compliance with a smooth 3DS2 flow. 


In summary, 3DS management capabilities add tremendous value to the payment orchestration platforms. The additional 3DS Routing and Flex 3DS features contribute to the desired effects of payment orchestration. They remove friction in the checkout page, improve customer experience, and lower direct and indirect costs. 

About Sunil Jhamb 

Sunil Jhamb is the CEO and Founder of WLPayments, a trusted global payments platform. Sunil has over 20 years of experience in consulting and strategy, and as a winner of MPE Influencer of the Year 2019, Sunil is an authority on international payments. Before this, Sunil founded Newgen Payments and worked at GlobalCollect as the global planning and strategy director – developing corporate strategies and driving revenue opportunities globally. 


About WLPayments 

WLPayments offers an acquirer-agnostic payment orchestration platform for ISOs, PSPs, acquirers, banks, and online merchants. WLPayments offers its partners a modern and modular platform with many innovative, conversion-boosting features, taking care of all their payment challenges.

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Keywords: payments orchestration, 3-D Secure, credit card, merchants, customer experience, SCA, PSD2
Categories: Payments & Commerce
Companies: WLPayments
Countries: World
This article is part of category

Payments & Commerce


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