# What is 3D Secure?

What is 3D Secure? An additional security layer for card transactions — the customer verifies identity via an SMS code or biometrics.

## How it works in practice

3D Secure is a double-edged sword. On one hand, it protects against chargebacks and shifts liability to the bank. On the other, it adds a checkout step that can raise abandonment. In many markets, it's required above certain transaction thresholds.

## Related metrics

- PSD2 — the European regulation that mandated 3DS2
- Chargeback — 3DS reduces chargebacks from fraud
- Checkout UX — adds a step that may hurt CR
- Friendly Fraud — doesn't protect against friendly fraud

## Common misconception

'3D Secure guarantees zero chargebacks.' It doesn't. 3DS protects against unauthorized fraud (stolen cards). Friendly fraud (a customer falsely claiming non-delivery) isn't covered — 30-40% of chargebacks are friendly fraud that 3DS can't stop.

## How to fix it

3DS causing high checkout abandonment? (1) Move to 3DS2 (a newer version that adds less friction), (2) set up risk-based authentication — only flagged transactions get 3DS, (3) check whether your gateway supports a frictionless flow.

## Real-world example

An electronics store required 3DS on every transaction. Checkout abandonment rose 18%. Switching to risk-based authentication meant only 12% of transactions triggered 3DS — abandonment returned to normal, and chargebacks fell 65%.

## Where to start

Set up 3DS as risk-based, not mandatory for everything. Transactions over $300, new cards, and foreign countries — apply 3DS. Repeat customers with history — use a frictionless flow.

---

Category: Payments · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/3d-secure