By merchanservicesonline December 20, 2025
With the growing use of online payments, achieving a balance between security and the user experience has become more important. The 3DS 2.2 solution makes it possible for companies to satisfy the SCCA verification with minimal friction during the checkout process. Understanding when to add an extra step for authentication and where to use the frictionless process can ensure your business is not compromised while protecting against fraud issues.
What Is Strong Customer Authentication?
Strong customer authentication, commonly referred to as SCA, is a security method that is involved in verifying a customer as the actual person involved in making payments or accessing an account. As mentioned, authentication is basically a means of proving a person’s identity, and in online payments, this is accomplished through various forms of authentication that typically involve three components, something that the customer knows, for example, a password or a PIN; something that the customer has, for example, a mobile phone or a security token; and something that the customer is, for example, a fingerprint or facial recognition.
In an effort to provide more safety when making payments over the internet, the regulation in Europe, known as the revised Payment Services Directive, or “PSD2” in shortened form, mandates that two out of these three methods have to be used in combination.
As the use of online shopping and electronic payments increases, the security requirements have also had to be upgraded. The original 3D Secure solution has since undergone an upgrade to 3DS 2.1 in an effort to provide mobile payments and more intelligent authentication with more available data. This is followed by the development of the EMV 3DS 2.2 solution to provide smooth checkout flows, improved risk analysis, and more flexible low-risk payment processing with security.
As online payments keep rising, fraud risks are also increasing at a growing pace. To ensure security for online customers and businesses, governments and online payment systems are adopting stricter security regulations.
A similar trend is being followed by Australia as well. According to regulatory guidelines established by the Australian Payments Network, merchants are mandated to implement strong authentication using 3D Secure and two-factor/multi-factor authentication. Customers are also required to provide a password, verify a one-time password, or fulfill any other authentication procedure to complete a payment.
As international trade continues to accelerate, these regulations are playing an increasing part in determining payment practices around the world. Markets such as the US form a significant part of this payment ecosystem and are accelerating the adoption of 3D Secure and strong customer authentication.
What are the Benefits of 3D Secure Payments?
By incorporating 3D secure payments into a business model, companies can strike a perfect balance between security and a seamless checkout process. Through new offerings such as 3DS 2.2, companies can make their own choices on whether or not additional approvals are required for a payment.
One of the most important advantages of using 3D Secure authentication in online transactions is enhanced payment security. It provides an additional level of security, validating that the actual party paying for the transaction is indeed trustworthy. Low-risk transactions are handled in frictionless flows, while high-risk ones proceed through step-up authentication.
Often, the user experience is also enhanced by 3D Secure. Compared to previous versions, the current version is faster, mobile-friendly, and optimized for smooth support across devices. Customers need authentication only when required, thereby getting rid of frustrating experiences that may lead to cart abandonment. Customers feel secure which helps to build trust, ensuring regular purchases and higher loyalty.
In terms of conducting business, the role of 3D Secure is to enhance financial protection. By using authentication in the proper way, the risk in case of a fraud-related chargeback will shift from the merchant to the financial institution.
Key Differences Between 3D Secure 2.1 and 2.2 Explained
The key difference in 3D Secure 2.1 and 2.2 primarily involves the exemptions and who has the authority to request them. Both have the capability for issuers to implement risk-based authentication. This means that for low-risk transactions, the frictionless flow allows the transaction to occur without requiring additional steps from the customers. However, for 3D Secure 2.2, the merchants have greater control.
This means that through the new version, the merchants and their payment service providers have the capability to request the exemptions through their acquirers. Exemptions are usually granted through Transaction Risk Analysis. This entails the use of transaction data and its risk levels to validate that the transaction is secure.
Secondly, the merchants have the capability to request exemptions through their association as reputable vendors. This is not the case for 3D Secure 2.1. The version relies primarily on issuers for exemption. Lastly, both MasterCard and Visa have differences when implementing exemptions. MasterCard allows for exemptions on the basis of low-risk transactions and transaction analysis. Visa does not offer the exemption on 2.1. Nevertheless, Visa allows certain business transactions to qualify for exemptions on version 2.1. This indicates that version 2.2 has greater flexibility.
What are the SCA Exemptions? Why Do They Matter?
As we already understood, SCA exemptions allow some payment transactions to go ahead without going through 3D secure verification, subject to certain rules and regulations. If a payment transaction triggers an SCA exemption, the customer will not have to perform any additional security checks. This will increase conversions as payment becomes faster and hassle-free, which results in increased payment success rates. There are some general exemptions for SCA that merchants need to be aware of.
Firstly if the transaction amount is low, under €30, then the strong authentication rule is removed. The bank monitors such payments, and once the customer makes five payments or the accumulated amount exceeds €100, the customer needs to undergo authentication. Secondly another important exception to the rule is Transaction Risk Analysis, or TRA for short. In such cases, sophisticated risk analysis systems scrutinize the transaction in real-time. If the transaction is labeled ‘low risk,’ then the company can complete the transaction without relying on 3D Secure, regardless of the amount.
Exemptions are available for recurring card payments, provided the first payment is already authenticated, and the cardholder has authorized the payments. Proper utilization of exemptions for SCA brings frictionless experience without compromising security. Present-day risk engines process various factors in a matter of seconds, which may include the value of the transaction, customer information, device information, and behavior characteristics.
These parameters are passed on to the issuer, which determines whether authentication is necessary or not. Depending on that, the transaction gets processed. Customers may experience an improved rate of conversions with the TRA exemption, but at the cost of liability. Merchants can thereby safeguard their business with the help of superior risk analysis rather than relying solely on authentication.
Common Challenges of Implementing 3D Secure 2.2 and Solutions
Customer drop-off during authentication is one issue to consider. While 3DS 2.2 supports frictionless journeys, step-up authentication is required for certain payments. If customers are not alerted in advance and end up going through a long verification process, they might just leave without purchasing. To avoid this, there is a risk-based rule that customers can use for low-risk payments without dropping off. Messages on the screen as to why customers are being asked to verify also help.
A second problem can be technical readiness. An upgrade to 3DS 2.2 could potentially involve updates to the system, especially in older payment systems that may still be in use by a particular business. There could also be integration issues that might slow down the upgrade or lead to issues at the checkout phase.
Another area where challenges may lie for merchants is customer awareness. Many consumers will not understand what 3DS 2.2 is or why they are being requested to complete a payment verification. This can lead to customer frustration. This can easily be solved by the merchant by explaining the procedure in simple words and the security reasons. Including customer help or live support capabilities will also increase customer confidence and help 3DS 2.2 become a seamless part of the process.
The Role of Encryption and Tokenization In 3d Secure Payment Solutions
Encryption and tokenization have become major factors in ensuring that payments made via 3D Secure are both secure and trustworthy. This technology operates in the background to safeguard client information throughout the entire transaction process.
Encryption safeguards sensitive data by encrypting credit card details. The moment a customer submits their credit card details, it is immediately encrypted. Regardless of who attempts to tap this information, it is inaccessible without the proper key. It safeguards card information when it’s being transferred from the customer to the merchant and then to the bank.
Another security feature offered by tokenization is that it protects sensitive data by ensuring that it is always stored in a non-reversible or original form. The cards are always replaced with numbers that are generated through tokenization. These numbers do not have any value, and the security of the token is not compromised. If unauthorized people access the data, it will not be useful because it is just stored numbers. Both encryption and tokenization make 3D payments secure for clients and businesses.
Conclusion
3DS 2.2 enables merchants to remain secure without payment flows becoming complicated for consumers. By recognizing where there is a need for strong authentication as well as where a seamless flow makes sense, merchants can decrease fraud, comply with SCA, and also increase trust and smooth payment flows. Finding a balance brings consumer trust, secure payments, and a smooth checkout process.
FAQs
What is 3DS 2.2?
The 3DS 2.2 is considered to be an advanced authentication standard, which enhances payment security while also facilitating smooth and fast checkout experiences.
How does 3DS 2.2 support SCA?
It complies with the SCA regulation through the implementation of risk-based authentication and the concept of exemptions for low-risk transactions.
In what circumstances is frictionless authentication employed?
Frictionless flows are relevant for low-risk payments that are eligible for exemptions to the SCA.
Does 3DS 2.2 lower checkout abandonment?
Yes, it reduces unnecessary authentication procedures, making it easier for customers to complete payments.
Who should use 3DS 2.2?
Any e-commerce business taking credit card payments and trying to have safe, compliant, and highly converting checkouts.