One of the biggest issues in eCommerce is the difficulty of verifying a customer's identity. Credit card fraud causes huge problems for both shoppers and merchants alike, what with chargebacks, lost merchandise, lost profits, and the overall damage to the reputation of eCommerce. Thankfully, we now have more thorough ways to authenticate transactions, including Verified by Visa, based on the 3D Secure 2.0 protocol. To help verify that a purchase is being made by the actual cardholder, a large amount of information is passed between the merchant and financial institution to ensure that the purchase meets the customer's established buying patterns, comes from a recognized device and location, and more.

How Verified by Visa works

Verified by Visa is available for both merchants and customers. Customers can enroll any Visa-branded card to require the entry of an extra, personal password to authenticate their online purchases. Merchants who set up Verified by Visa on their store will be protected from high-risk transactions (transactions that do not match the data for the specific customer) by requiring an additional step of identity verification.

The additional verification takes the form of a password known only to the cardholder. The password isn't shared with the merchant, but goes straight to the financial institution by secure connection. Once the authentication goes through, the cardholder completes their purchase as normal.

Extra security for merchants and customers

Over half of consumers are still hesitant to shop online, but with the additional security provided by Verified by Visa and other 3D Secure 2.0-based services, eCommerce is becoming safer than ever. Even if a credit card is lost or stolen, a thief won't be able to make online purchases without the password, making the card useless to anyone but the cardholder.

As an eCommerce merchant, you'll benefit from this too. Less potential for fraud means fewer chargebacks, and less risk of losing merchandise to fraudulent sales. Your bottom line is more solid and you gain the trust of your customers. It works out great for all involved, except the thieves!