3-D Secure

Last updated

3-D Secure is a protocol designed to be an additional security layer for online credit and debit card transactions. The name refers to the "three domains" which interact using the protocol: the merchant/acquirer domain, the issuer domain, and the interoperability domain. [1]

Contents

Originally developed in the autumn of 1999 by Celo Communications AB (which was acquired by Gemplus Associates and integrated into Gemplus, Gemalto and now Thales Group) for Visa Inc. in a project named "p42" ("p" from Pole vault as the project was a big challenge and "42" as the answer from the book The Hitchhiker's Guide to the Galaxy ). A new updated version was developed by Gemplus between 2000-2001.

In 2001 Arcot Systems (now CA Technologies) and Visa Inc. [2] with the intention of improving the security of Internet payments, and offered to customers under the Verified by Visa brand (later rebranded as Visa https://shift.store/legaocyleaf/). Services based on the protocol have also been adopted by Mastercard as SecureCode (later rebranded as Identity Check), by Discover as ProtectBuy, [3] by JCB International as J/Secure, and by American Express as American Express SafeKey. [4] Later revisions of the protocol have been produced by EMVCo under the name EMV 3-D Secure. Version 2 of the protocol was published in 2016 with the aim of complying with new EU authentication requirements and resolving some of the short-comings of the original protocol. [5]

Analysis of the first version of the protocol by academia has shown it to have many security issues that affect the consumer, including a greater surface area for phishing and a shift of liability in the case of fraudulent payments. [6]

Description and basic aspects

The basic concept of the protocol is to tie the financial authorization process with online authentication. This additional security authentication is based on a three-domain model (hence the "3-D" in the name). The three domains are:

The protocol uses XML messages sent over SSL connections with client authentication [7] (this ensures the authenticity of both peers, the server and the client, using digital certificates).

A transaction using Verified by Visa or SecureCode will initiate a redirection to the website of the card issuer to authorize the transaction. Each issuer could use any kind of authentication method (the protocol does not cover this) but typically, a password tied to the card is entered when making online purchases. The Verified by Visa protocol recommends the card issuer's verification page to load in an inline frame session. In this way, the card issuer's systems can be held responsible for most security breaches. Today it is easy to send a one-time password as part of an SMS text message to users' mobile phones and emails for authentication, at least during enrollment and for forgotten passwords.

The main difference between Visa and Mastercard implementations lies in the method to generate the UCAF (Universal Cardholder Authentication Field): Mastercard uses AAV (Accountholder Authentication Value) and Visa uses CAVV (Cardholder Authentication Verification Value).[ clarification needed ]

3-D Secure Flow 3D Secure Flow.png
3-D Secure Flow

ACS providers

In the 3-D Secure protocol, the ACS (access control server) is on the card issuer side. Currently, most card issuers outsource ACS to a third party. Commonly, the buyer's web browser shows the domain name of the ACS provider, rather than the card issuer's domain name; however, this is not required by the protocol. Dependent on the ACS provider, it is possible to specify a card issuer-owned domain name for use by the ACS.

MPI providers

Each 3-D Secure version 1 transaction involves two Internet request/response pairs: VEReq/VERes and PAReq/PARes. [7] Visa and Mastercard do not permit merchants to send requests directly to their servers. Merchants must instead use MPI (merchant plug-in) providers.

Merchants

The advantage for merchants is the reduction of "unauthorized transaction" chargebacks. One disadvantage for merchants is that they have to purchase a merchant plug-in (MPI) to connect to the Visa or Mastercard directory server. This is expensive[ clarification needed ] (setup fee, monthly fee, and per-transaction fee); at the same time, it represents additional revenue for MPI providers. Supporting 3-D Secure is complicated and, at times, creates transaction failures. Perhaps the biggest disadvantage for merchants is that many users view the additional authentication step as a nuisance or obstacle, which results in a substantial increase in transaction abandonment and lost revenue. [8]

Buyers and credit card holders

In most current implementations of 3-D Secure, the card issuer or its ACS provider prompts the buyer for a password that is known only to the card issuer or ACS provider and the buyer. Since the merchant does not know this password and is not responsible for capturing it, it can be used by the card issuer as evidence that the purchaser is indeed their cardholder. This is intended to help decrease risk in two ways:

  1. Copying card details, either by writing down the numbers on the card itself or by way of modified terminals or ATMs, does not result in the ability to purchase over the Internet because of the additional password, which is not stored on or written on the card.
  2. Since the merchant does not capture the password, there is a reduced risk from security incidents at online merchants; while an incident may still result in hackers obtaining other card details, there is no way for them to get the associated password.

3-D Secure does not strictly require the use of password authentication. It is said to be possible [9] to use it in conjunction with smart card readers, security tokens and the like. These types of devices might provide a better user experience for customers as they free the purchaser from having to use a secure password. Some issuers are now using such devices as part of the Chip Authentication Program or Dynamic Passcode Authentication schemes. [10]

One significant disadvantage is that cardholders are likely to see their browser connect to unfamiliar domain names as a result of vendors' MPI implementations and the use of outsourced ACS implementations by card issuers, which might make it easier to perform phishing attacks on cardholders.

General criticism

Verifiability of site identity

The system involves a pop-up window or inline frame appearing during the online transaction process, requiring the cardholder to enter a password which, if the transaction is legitimate, their card issuer will be able to authenticate. The problem for the cardholder is determining if the pop-up window or frame is really from their card issuer when it could be from a fraudulent website attempting to harvest the cardholder's details. Such pop-up windows or script-based frames lack any access to any security certificate, eliminating any way to confirm the credentials of the implementation of 3-D Secure.

The Verified by Visa system has drawn some criticism, [11] [12] [13] [6] since it is hard for users to differentiate between the legitimate Verified by Visa pop-up window or inline frame, and a fraudulent phishing site. This is because the pop-up window is served from a domain which is:

In some cases, the Verified by Visa system has been mistaken by users for a phishing scam [14] and has itself become the target of some phishing scams. [15] The newer recommendation to use an inline frame (iframe) instead of a pop-up has reduced user confusion, at the cost of making it harder, if not impossible, for the user to verify that the page is genuine in the first place. As of 2022, web browsers do not provide a way to check the security certificate for the contents of an iframe. Some of these concerns about site validity for Verified by Visa are mitigated, however, as its current implementation of the enrollment process requires entering a personal message which is displayed in later Verified by Visa pop-ups to provide some assurance to the user the pop-ups are genuine. [16]

Some card issuers also use activation-during-shopping (ADS), [17] in which cardholders who are not registered with the scheme are offered the opportunity of signing up (or forced into signing up) during the purchase process. This will typically take them to a form in which they are expected to confirm their identity by answering security questions which should be known to their card issuer. Again, this is done within an iframe where they cannot easily verify the site they are providing this information to—a cracked site or illegitimate merchant could in this way gather all the details they need to pose as the customer.

Implementation of 3-D Secure sign-up will often not allow a user to proceed with a purchase until they have agreed to sign up to 3-D Secure and its terms and conditions, not offering any alternative way of navigating away from the page than closing it, thus abandoning the transaction.

Cardholders who are unwilling to take the risk of registering their card during a purchase, with the commerce site controlling the browser to some extent, can in some cases go to their card issuer's website in a separate browser window and register from there. When they return to the commerce site and start over they should see that their card is registered. The presence on the password page of the personal assurance message (PAM) that they chose when registering is their confirmation that the page is coming from the card issuer. This still leaves some possibility of a man-in-the-middle attack if the cardholder cannot verify the SSL server certificate for the password page. Some commerce sites will devote the full browser page to the authentication rather than using a frame (not necessarily an iframe), which is a less secure object. In this case, the lock icon in the browser should show the identity of either the card issuer or the operator of the verification site. The cardholder can confirm that this is in the same domain that they visited when registering their card if it is not the domain of their card issuer.

Mobile browsers present particular problems for 3-D Secure due to the common lack of certain features such as frames and pop-ups. Even if the merchant has a mobile website, unless the issuer is also mobile-aware, the authentication pages may fail to render properly, or even at all. In the end, many[ vague ] analysts have concluded that the activation-during-shopping (ADS) protocols invite more risk than they remove and furthermore transfer this increased risk to the consumer.

In some cases, 3-D Secure ends up providing little security to the cardholder, and can act as a device to pass liability for fraudulent transactions from the card issuer or retailer to the cardholder. Legal conditions applied to the 3-D Secure service are sometimes worded in a way that makes it difficult for the cardholder to escape liability from fraudulent transactions. [6]

Geographic discrimination

Card issuers and merchants may use 3-D Secure systems unevenly with regard to card issuers that issue cards in several geographic locations, creating differentiation, for example, between the domestic US- and non-US-issued cards. For example, since Visa and Mastercard treat the unincorporated US territory of Puerto Rico as a non-US international, rather than a domestic US location, cardholders there may confront a greater incidence of 3-D Secure queries than cardholders in the fifty states. Complaints to that effect have been received by Puerto Rico Department of Consumer Affairs "equal treatment" economic discrimination site. [18]

3-D Secure as strong customer authentication

Version 2 of 3-D Secure, which incorporates one-time passcodes, is a form of software-based strong customer authentication as defined by the EU's Revised Directive on Payment Services (PSD2); earlier variants used static passwords, which are not sufficient to meet the directive's requirements.

3-D Secure relies upon the issuer actively being involved and ensuring that any card issued becomes enrolled by the cardholder; as such, acquirers must either accept unenrolled cards without performing strong customer authentication or reject such transactions, including those from smaller card schemes which do not have 3-D Secure implementations.

Alternative approaches perform authentication on the acquiring side, without requiring prior enrollment with the issuer. For instance, PayPal's patented 'verification' [19] uses one or more dummy transactions are directed towards a credit card, and the cardholder must confirm the value of these transactions, although the resulting authentication cannot be directly related to a specific transaction between merchant and cardholder. A patented [20] system called iSignthis splits the agreed transaction amount into two (or more) random amounts, with the cardholder then proving that they are the owner of the account by confirming the amounts on their statement. [21]

ACCC blocks 3-D Secure proposal

A proposal to make 3-D Secure mandatory in Australia was blocked by the Australian Competition & Consumer Commission (ACCC) after numerous objections and flaw-related submissions were received. [22]

India

Some countries like India made use of not only CVV2, but 3-D Secure mandatory, a SMS code sent from a card issuer and typed in the browser when you are redirected when you click "purchase" to the payment system or card issuer system site where you type that code and only then the operation is accepted. Nevertheless, Amazon can still do transactions from other countries with turned-on 3-D Secure. [23]

3-D Secure 2.0

In October 2016, EMVCo published the specification for 3-D Secure 2.0; it is designed to be less intrusive than the first version of the specification, allowing more contextual data to be sent to the customer's card issuer (including mailing addresses and transaction history) to verify and assess the risk of the transaction. The customer would only be required to pass an authentication challenge if their transaction is determined to be of a high risk. In addition, the workflow for authentication is designed so that it no longer requires redirects to a separate page, and can also activate out-of-band authentication via an institution's mobile app (which, in turn, can also be used with biometric authentication). 3-D Secure 2.0 is compliant with EU "strong customer authentication" mandates. [5] [24] [25]

See also

Related Research Articles

<span class="mw-page-title-main">Debit card</span> Card used for financial transactions, usually without a credit line

A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either the front or the back. Many new cards now have a chip on them, which allows people to use their card by touch (contactless), or by inserting the card and keying in a PIN as with swiping the magnetic stripe. Debit cards are similar to a credit card, but the money for the purchase must be in the cardholder's bank account at the time of the purchase and is immediately transferred directly from that account to the merchant's account to pay for the purchase.

A personal identification number is a numeric passcode used in the process of authenticating a user accessing a system.

<span class="mw-page-title-main">EMV</span> Smart payment card standard

EMV is a payment method based on a technical standard for smart payment cards and for payment terminals and automated teller machines which can accept them. EMV stands for "Europay, Mastercard, and Visa", the three companies that created the standard.

Secure Electronic Transaction (SET) is a communications protocol standard for securing credit card transactions over networks, specifically, the Internet. SET was not itself a payment system, but rather a set of security protocols and formats that enabled users to employ the existing credit card payment infrastructure on an open network in a secure fashion. However, it failed to gain attraction in the market. Visa now promotes the 3-D Secure scheme.

An e-commerce payment system facilitates the acceptance of electronic payment for offline transfer, also known as a subcomponent of electronic data interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking.

<span class="mw-page-title-main">Dynamic currency conversion</span> Foreign exchange process

Dynamic currency conversion (DCC) or cardholder preferred currency (CPC) is a process whereby the amount of a credit card transaction is converted at the point of sale, ATM or internet to the currency of the card's country of issue. DCC is generally provided by third party operators in association with the merchant, and not by a card issuer. Card issuers permit DCC operators to offer DCC in accordance with the card issuers' processing rules. However, using DCC, the customer is usually charged an amount in excess of the transaction amount converted at the normal exchange rate, though this may not be obviously disclosed to the customer at the time. The merchant, the merchant's bank or ATM operator usually impose a markup on the transaction, in addition to the exchange rate that would normally apply, sometimes by as much as 18%.

<span class="mw-page-title-main">Payment card</span> Card issued by a financial institution that can be used to make a payment

Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner to access the funds in the customer's designated bank accounts, or through a credit account and make payments by electronic transfer with a payment terminal and access automated teller machines (ATMs). Such cards are known by a variety of names, including bank cards, ATM cards, client cards, key cards or cash cards.

The Payment Card Industry Data Security Standard is an information security standard used to handle credit cards from major card brands. The standard is administered by the Payment Card Industry Security Standards Council, and its use is mandated by the card brands. It was created to better control cardholder data and reduce credit card fraud. Validation of compliance is performed annually or quarterly with a method suited to the volume of transactions:

Internet fraud prevention is the act of stopping various types of internet fraud. Due to the many different ways of committing fraud over the Internet, such as stolen credit cards, identity theft, phishing, and chargebacks, users of the Internet, including online merchants, financial institutions and consumers who make online purchases, must make sure to avoid or minimize the risk of falling prey to such scams.

<span class="mw-page-title-main">Chip Authentication Program</span> Aspect of banking security

The Chip Authentication Program(CAP) is a MasterCard initiative and technical specification for using EMV banking smartcards for authenticating users and transactions in online and telephone banking. It was also adopted by Visa as Dynamic Passcode Authentication (DPA). The CAP specification defines a handheld device (CAP reader) with a smartcard slot, a numeric keypad, and a display capable of displaying at least 12 characters (e.g., a starburst display). Banking customers who have been issued a CAP reader by their bank can insert their Chip and PIN (EMV) card into the CAP reader in order to participate in one of several supported authentication protocols. CAP is a form of two-factor authentication as both a smartcard and a valid PIN must be present for a transaction to succeed. Banks hope that the system will reduce the risk of unsuspecting customers entering their details into fraudulent websites after reading so-called phishing emails.

<span class="mw-page-title-main">Credit card fraud</span> Financial crime

Credit card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. The purpose may be to obtain goods or services or to make payment to another account, which is controlled by a criminal. The Payment Card Industry Data Security Standard is the data security standard created to help financial institutions process card payments securely and reduce card fraud.

A merchant plug-in (MPI) is a software module designed to facilitate 3-D Secure verifications to help prevent credit card fraud. The MPI identifies the account number and queries the servers of the card issuer to determine if it is enrolled in a 3D-Secure program and returns the web site address of the issuer access control server (ACS) if it is found. Merchants are responsible for using an SSL/TLS MPI at their servers.

<span class="mw-page-title-main">Multi-factor authentication</span> Method of computer access control

Multi-factor authentication is an electronic authentication method in which a user is granted access to a website or application only after successfully presenting two or more pieces of evidence to an authentication mechanism. MFA protects personal data—which may include personal identification or financial assets—from being accessed by an unauthorized third party that may have been able to discover, for example, a single password.

Card schemes are payment networks linked to payment cards, such as debit or credit cards, of which a bank or any other eligible financial institution can become a member. By becoming a member of gets the possibility to issue cards or acquire merchants operating on the network of that card scheme. UnionPay, Visa and MasterCard are three of the largest global brands, known as card schemes, or card brands. Billions of transactions go through their cards on a yearly basis.

<span class="mw-page-title-main">Rede S.A.</span>

Rede known as Redecard is a Brazilian multi-brand acquirer with 25 brands in its portfolio, for credit, debit and benefit cards. Its activities include merchant acquiring, capturing, transmission, processing and settlement of credit and debit card transactions, prepayment of receivables to merchants, rental of POS terminals, check verification through POS terminals, credit card machine and the capture and transmission of transactions using benefit-voucher, private-label cards and loyalty programs such as Multiplus. The company is the first largest in its sector. The company was traded in BM&F Bovespa and disclosed in September 24, 2012.

<span class="mw-page-title-main">Card security code</span> Security feature on payment cards

A card security code is a series of numbers that, in addition to the bank card number, is printed on a credit or debit card. The CSC is used as a security feature for card not present transactions, where a personal identification number (PIN) cannot be manually entered by the cardholder. It was instituted to reduce the incidence of credit card fraud. Unlike the card number, the CSC is deliberately not embossed, so that it is not read when using a mechanical credit card imprinter which will only pick up embossed numbers.

Strong customer authentication (SCA) is a requirement of the EU Revised Directive on Payment Services (PSD2) on payment service providers within the European Economic Area. The requirement ensures that electronic payments are performed with multi-factor authentication, to increase the security of electronic payments. Physical card transactions already commonly have what could be termed strong customer authentication in the EU, but this has not generally been true for Internet transactions across the EU prior to the implementation of the requirement, and many contactless card payments do not use a second authentication factor.

<span class="mw-page-title-main">SQRL</span> Draft open standard for identity verification

SQRL or Secure, Quick, Reliable Login is a draft open standard for secure website login and authentication. The software typically uses a link of the scheme sqrl:// or optionally a QR code, where a user identifies via a pseudonymous zero-knowledge proof rather than providing a user ID and password. This method is thought to be impervious to a brute-force password attack or data breach. It shifts the burden of security away from the party requesting the authentication and closer to the operating-system implementation of what is possible on the hardware, as well as to the user. SQRL was proposed by Steve Gibson of Gibson Research Corporation in October 2013 as a way to simplify the process of authentication without the risk of revelation of information about the transaction to a third party.

<span class="mw-page-title-main">Google Pay (payment method)</span> Mobile payments platform developed by Google

Google Pay is a mobile payment service developed by Google to power in-app, online, and in-person contactless purchases on mobile devices, enabling users to make payments with Android phones, tablets, or watches. Users can authenticate via a PIN, passcode, or biometrics such as 3D face scanning or fingerprint recognition.

The Four Corners model, often referred to as the Four Party Scheme is the most used card scheme in card payment systems worldwide. This model was introduced in the 1990s. It is a user-friendly card payment system based on an interbank clearing system and economic model established on multilateral interchange fees (MIF) paid between banks or other payment institutions.

References

  1. ↑ "3-D Secure".
  2. ↑ "Visa USA tightens security with Arcot". ZDnet.
  3. ↑ "ProtectBuy". discover.com. Archived from the original on 2019-08-22. Retrieved 2019-08-22.
  4. ↑ "SafeKey". AmericanExpress.com. Archived from the original on 2011-08-07. Retrieved 2010-08-11.
  5. 1 2 "Merchants can't let 'PSD2' and 'SCA' be vague initials". PaymentsSource. 12 June 2019. Retrieved 2019-07-11.
  6. 1 2 3 Murdoch, Steven J.; Anderson, Ross (25–28 January 2010). Sion, R. (ed.). Verified by Visa and MasterCard SecureCode: or, How Not to Design Authentication (PDF). Financial Cryptography and Data Security FC2010. Vol. 6052. Tenerife: Springer. pp. 336–342. doi:10.1007/978-3-642-14577-3_27. ISBN   978-3-642-14992-4 . Retrieved 2012-04-23.
  7. 1 2 "Verified by Visa Implementation Guide" (PDF).
  8. ↑ "Are Verified by Visa and MasterCard SecureCode Conversion Killers?". practicalecommerce.com. 14 June 2013. Retrieved 2013-07-30. This 2010 study documented increases in the number of abandoned transactions of 10% to 12% for merchants newly joining the program.
  9. ↑ "Card authentication and 3D Secure". stripe.com. Retrieved 2021-08-25.
  10. ↑ "What is 3D Secure? Advantages for E-commerce". MONEI. Retrieved 2021-08-25.
  11. ↑ "Antiworm: Verified by Visa (Veriphied Phishing?)". Antiworm.blogspot.com. 2006-02-02. Retrieved 2010-08-11.
  12. ↑ Muncaster, Phil. "Industry lays into 3-D Secure - 11 Apr 2008". IT Week. Archived from the original on 2008-10-07. Retrieved 2010-08-11.
  13. ↑ Brignall, Miles (2007-04-21). "Verified by Visa scheme confuses thousands of internet shoppers". The Guardian. London. Archived from the original on 6 May 2010. Retrieved 2010-04-23.
  14. ↑ "Is securesuite.co.uk a phishing scam?". Ambrand.com. Archived from the original on 2010-06-16. Retrieved 2010-08-11.
  15. ↑ "Verified By Visa Activation – Visa Phishing Scams". MillerSmiles.co.uk. 2006-08-22. Archived from the original on 8 July 2010. Retrieved 2010-08-11.
  16. ↑ "Verified by Visa FAQs". www.visa.co.uk. Retrieved 6 October 2016.
  17. ↑ "Activation During Shopping" (PDF). Visa Europe. Retrieved 2010-08-11.
  18. ↑ "daco.pr.gov". daco.pr.gov. Archived from the original on 2014-08-12. Retrieved 2014-07-17.
  19. ↑ "US2001021725 System and Method for Verifying a Financial Instrument". Patentscope.wipo.int. 2002-01-17. Retrieved 2014-07-17.
  20. ↑ "AU2011000377 Methods and Systems for Verifying Transactions". Patentscope.wipo.int. Retrieved 2014-07-17.
  21. ↑ "EPCA Payment Summit: iSignthis presents its authentication service as an alternative to 3D Secure". The Paypers. Archived from the original on 2013-11-01. Retrieved 2014-07-17.
  22. ↑ "ACCC Releases Draft Determination Against Mandated Use Of 3D Secure For Online Payments".
  23. ↑ "Amazon.in Help: About CVV and 3-D Secure". www.amazon.in. Archived from the original on 2021-06-24. Retrieved 2020-06-17. 3-D secure password has been made mandatory by the Reserve Bank of India to ensure safer online shopping. This will prevent misuse of a lost/stolen card as the user will be unable to proceed unless they enter the password associated with your card, created by yourself and known only to you.
  24. ↑ "Adyen Touts Its 3-D Secure 2.0 Service As "First" to Market". Digital Transactions. Retrieved 2019-07-11.
  25. ↑ Godement, Olivier. "Stripe: 3D Secure 2 - Guide to 3DS2 Authentication". Stripe . Retrieved 2019-07-11.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.