Fighting fraud with EMV 3-D Secure

According to PSCU’s most recent Eye on Payments study, 97% of consumers shop online at least once a year. As more consumers seek out online and digital channels to make purchases and transactions, it stands to reason more fraudsters are also turning to these avenues to carry out fraud. In fact, it is estimated that more than two-thirds of fraud losses occur on e-commerce channels, and nearly 4% of e-commerce revenue is lost to payments fraud globally, per this MRC Global Fraud and Payments Report.

What is EMV 3-D Secure?

One way financial institutions and merchants are stopping fraudsters in their tracks is through the use of EMV® 3-D Secure (EMV 3DS), a robust platform from the global technical body EMVCo which helps protect against e-commerce fraud exposure. 3-D Secure stands for “Three Domain Secure,” which refers to the three parties involved in any secure payment: the issuer, the acquirer and the network processing the transaction. At the time of online checkout, it connects digital merchants and financial institutions to prevent fraud and unauthorized use of payment cards online. More than 80,000 e-commerce merchants in the U.S. currently leverage EMV 3DS, with five of the top seven U.S. e-commerce merchants participating – Amazon, Apple, Best Buy, eBay and Home Depot.

The EMV 3DS platform combines data from all of its merchants, issuers and networks to authenticate the purchaser’s identity and predict fraud on each transaction. The platform can provide meaningful scale by pulling in data of transactions from 229 countries worldwide and more than 5,000 financial institutions. It can also respond within milliseconds to fraud patterns detected across any part of the network.

What are the benefits for CUs?

As e-commerce continues to expand, so too will digital fraud. EMV 3DS can help credit unions combat digital payments fraud, while also ensuring credit unions are more readily and easily adhering to new rules or regulations around security and data protection. It is already fully compliant with regulations like PSD-2 and card scheme requirements.

Outside of helping identify fraud transactions with high accuracy, EMV 3DS also provides an elevated member experience. According to the same MRC Global Fraud and Payments Report, e-commerce transactions are four times more likely to be declined than in-store transactions. A false decline on a legitimate purchase can negatively impact the member experience and push members to use other cards. By utilizing the consortium of fraud data available in the EMV 3DS platform, credit unions can limit the number of false positives, while remaining confident actual fraud is still being blocked.

In addition to fraud patterns, EMV 3DS can offer credit unions valuable data insights into their members’ shopping behaviors, including members’ preferred merchants and the type of device and geolocation from which they are making purchases. Credit unions can leverage these insights to ensure they are meeting members with other types of solutions and offerings relevant to their needs.

Credit unions can take advantage of the power of EMV 3DS by working with a fintech that leverages this technology to help mitigate fraud. PSCU, the nation’s premier payments credit union service organization (CUSO) and an integrated financial technology solutions provider, utilizes EMV 3DS – among other tools – to help its Owner credit unions identify e-commerce fraud, access behavioral data and enhance the member experience. EMV 3DS has helped PSCU block almost $50 million in potentially fraudulent authentication requests on behalf of its credit unions so far in 2023. With a tool like EMV 3DS on their side, credit unions are well-equipped to achieve similar results, offering both a seamless and secure experience that can position their card firmly in the coveted top of wallet (whether physical or digital) spot.


Contact the author: PSCU

Contact the author: PSCU

Robert Duke

Robert Duke

Robert Duke is the manager of Risk Authentication at PSCU, where he helps clients implement comprehensive fraud mitigation strategies that encompass authentication. His background of nearly 34 years of managing ... Web: Details