Bahaa Abdul Hadi is an Identity Management expert and regularly shares his experiences with his audience through his blogs. This time he discusses about Frictionless Authentication.

For a seamless transaction, free from additional authentication steps, frictionless authentication is the way to go. Using the 3DS (3D secure) protocol, frictionless authentication allows transactions with low fraudulent risk to occur seamlessly.

Now transactions from card and digital devices can happen within seconds. Due to reduced friction, the chances of cart abandonment are extremely low.

Frictionless Authentication Process

According to Bahaa Abdul Hadi, frictionless authentication process happens as follows:

  • The merchant puts out a request for authentication along with device and transaction data.
  • The protocol for 3D secure assesses the risk of transaction by the issuer. Based on this, the 3D secure gauges the requirement for a challenge.
  • If the transaction is reported as “high risk”, the issuer has the right to demand more steps for authentication.
  • Frictionless authentication occurs if the transaction is deemed “low risk”.
  • After the transaction authentication, the merchant receives an approval. From there on, the transaction can be carried out normally.

Risk-based Assessments

Each transaction is scrutinized properly to look for potential risks. To make this assessment, the 3D secure protocol checks many factors, such as –

  • The status of the customer – whether they are new or existing.
  • The total value or amount of the undergoing transaction.
  • Information of the device on which the transaction is occurring.
  • The transaction history of the merchant or customer.
  • The behavior history of the merchant or customer.

Securing Frictionless Authentication

Suppose the transaction is labelled as “high risk”. In that case, a customer will have to go through additional authentication steps. This can be done in two ways: two-factor authentication or biometrics. Sometimes, both ways can be implemented.

When the customer clears both the steps, the transaction is considered secure. This is because a hacker or fraudster would not be able to access the biometric data or one-time password of the cardholder.

Frictionless Authentication Benefits

Apart from increasing the speed of transaction and offering protection, frictionless authentication has many other advantages. Some of them are:

  • Less risk of fraud – a fraud might get hold of the cardholder’s details. However, they will not have information regarding the biometrics and OTP (one-time password).
  • Easy compliance – With the help of 3D secure, you can easily comply with Strong Consumer Authentication (SCA) and PSD2 regulations.
  • Protection during chargeback – the liability of a fraud transaction falls upon the cardholder and not the merchant. This offers protection to merchants from losing money.
  • More authorization rates – the use of 3D secure can increasing authorization rates by 10 per cent.

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