Revisions to the 3DS security protocol have led to a 36% reduction in e-commerce fraud over the past year, despite a notable increase in online shopping, according to an analysis by LexisNexis Risk Solutions.
The updated 3DS 2.x protocol, which is being rolled out globally, includes support for mobile payments and enhanced two-factor authentication methods. This protocol is increasingly being adopted as part of the initiative towards Strong Customer Authentication (SCA).
The decrease in fraud rates contrasts with a 21% rise in e-commerce transactions over the last year, partly attributed to a staggering 182% growth in buy now, pay later offerings, along with the substantial shift towards e-commerce spurred by the global pandemic.
Stephen Topliss, vice president of fraud and identity for LexisNexis Risk Solutions, stated: “Today’s results underscore the effectiveness of the revised 3DS 2.x protocol in safeguarding consumers and businesses from fraud risk, an achievement made possible by our evolving regulatory landscape.”
He emphasized that the updated protocol allows for more sophisticated use of a global network of online behavior, locational data, device analysis, and other indicators. This enhancement enables issuing banks and merchants to better distinguish between fraudulent actors and legitimate users.
Notably, there has been a 9% decline in automated bot attacks targeting e-commerce, while attacks on media (up 174%) and financial services (up 28%) have increased. In the first half of 2021, the LexisNexis Digital Identity Network recorded 189 million bot attacks against e-commerce, alongside 683 million targeting financial services and 351 million against the media industry.