Ai Editorial by Christopher Staab, Managing Partner Americas, Airline Information
3-D Secure, also known as Verified by Visa, MasterCard Secure Code, JCB J/Secure, and American Express SafeKey, is a fraud prevention initiative launched by card schemes. Its intention is to improve the security of Internet payments and provide a shift of liability in case of fraudulent transactions.
In the airline industry, 3-D Secure is causing a classic struggle between airline Finance Departments and Sales & Marketing Departments. Finance tends to like 3-D Secure due the liability shift and the lower merchant service charges (MSC), whereas Sales & Marketing tend to dislike 3-D Secure, as it is seen to have a negative impact on online conversion rates, decreasing sales.
However, most Airlines already know that not all transactions have the same risk. For example, most top tier elite frequent flyer members booking the same route can, generally, be relied upon to be genuine.
Research by the PSP Adyen also showed that 3-D Secure in the USA will lead to a decrease in conversion of 45%, whereas mandating 3-D Secure in India actually increases conversion by 30%. More markets are shown in the graph below:
Adyen has therefore developed Dynamic 3-D Secure to apply 3-D Secure (or not apply it) based on the characteristics of each payment transaction! To find out more about Dynamic 3-D Secure, as well as other fraud prevention measures, we invite you to join the Airline & Travel Payments Summits.