3DS2 (3D Secure 2)

3DS2, or 3D Secure 2, represents an enhanced iteration of the original 3D Secure protocol, aimed at bolstering the security of online card transactions while simultaneously improving the user experience. This updated version meets the increasing demand for more efficient, mobile-optimised payment solutions and a smoother authentication process, making it particularly significant in sectors like travel, where rapid and secure transactions are crucial. In contrast to the original 3D Secure protocol, which frequently necessitated customers to input passwords or respond to security queries, 3DS2 employs a risk-based authentication method that utilises various data points to evaluate transaction risk. This approach minimises disruptions for customers, as only transactions deemed high-risk will necessitate additional authentication steps, allowing most legitimate transactions to be processed effortlessly in the background.

Role of 3DS2 in Travel Payments

In the travel sector, 3DS2 is essential for delivering improved security and a more streamlined user experience during the booking and payment phases. Travel businesses process a significant number of transactions, frequently involving substantial purchases like flights, authentication, and holiday packages. Consequently, preventing fraud is a primary concern. 3DS2 enhances the security of card-not-present transactions by introducing an additional layer of authentication, which helps to decrease the chances of fraudulent bookings and chargebacks.

Moreover, the travel industry is increasingly dependent on mobile bookings, with numerous customers finalising their travel purchases via smartphones and tablets. 3DS2 is designed for mobile payments, providing a smooth and user-friendly authentication process that does not interrupt the booking experience. This is particularly vital in travel, where customers anticipate a quick and seamless payment process, especially for last-minute or on-the-go reservations. By reducing the necessity for manual authentication, 3DS2 allows travel companies to offer a secure and efficient payment experience across all devices, boosting customer satisfaction and lowering cart abandonment rates.

Furthermore, 3DS2 employs risk-based authentication, assessing various data points—such as the customer’s location, device, and transaction history—before deciding if additional authentication is required. This approach minimises friction during low-risk transactions, enabling customers to finalise their bookings swiftly and securely. For travel companies, this translates to fewer failed transactions and an increased conversion rate, as customers face fewer hurdles when paying for their travel services.

Challenges of 3DS2

The adoption of 3DS2 poses numerous challenges for travel businesses, especially regarding technical integration and system upgrades. To leverage the advantages of 3DS2, travel companies must enhance their payment infrastructure to accommodate the new protocol, which often necessitates investment in advanced technologies and the allocation of development resources. This undertaking can be intricate and expensive, particularly for organisations relying on legacy systems or managing payments across diverse platforms and regions.

Another significant challenge is maintaining a seamless user experience during the transition to 3DS2. Although the protocol aims to reduce friction, any integration issues or improper implementations could lead to a cumbersome authentication process, potentially frustrating customers. Travel companies must ensure that risk-based authentication operates smoothly, avoiding unnecessary interruptions in the booking process, especially for high-value transactions or complex bookings that include flights and hotels. Thorough testing and system optimisation are essential to guarantee that 3DS2 functions effectively across all payment channels, including mobile and desktop.

Furthermore, as the travel industry serves a global clientele, businesses must navigate the diverse requirements and regulations surrounding payment authentication in various countries. While 3DS2 is a European initiative aligned with PSD2 regulations, travel companies with an international customer base must ensure compliance not only in Europe but also in all regions where they operate. This adds another layer of complexity to the implementation process, as companies must tailor their payment systems to adhere to both local and international regulations.

How Can Felloh Help with 3DS2?

Felloh makes it easier for travel companies to adopt 3DS2 by offering a flexible and efficient solution that simplifies the technical integration process. With our API-first platform, travel businesses can seamlessly integrate 3DS2 into their current payment systems, allowing for risk-based authentication without the burden of extensive development or expensive infrastructure changes. This ensures that travel companies can quickly and effectively implement 3DS2, reducing operational disruptions while bolstering the security of online transactions.

Beyond simplifying integration, Felloh enhances payment operations for travel businesses by automating essential processes like reconciling payments with bookings. This automation decreases the manual workload associated with transaction management, enabling companies to concentrate on providing an outstanding customer experience. Our platform also delivers critical insights into payment data and risk management, empowering travel companies to make strategic decisions on utilising 3DS2’s advanced security features.

With Felloh, travel companies can fully leverage the advantages of 3DS2—such as improved security, enhanced user experience, and streamlined payment processes—while minimising the technical and operational hurdles that often accompany the adoption of new payment technologies. This comprehensive approach allows travel businesses to remain competitive, offering secure and seamless payment experiences that satisfy both regulatory standards and customer demands.