3DS Authentication Under Scrutiny as E-Commerce Stakeholders Look to Break Data Deadlock

Why It Matters

The data deadlock hampers fraud prevention and conversion, costing South African merchants billions of rands (≈ $50 million) in lost revenue. Resolving it could lower challenge rates, improve checkout experience, and reduce card‑not‑present fraud across e‑commerce.

Key Takeaways

• Mastercard's Essential Data Requirement for 3DS launched April 1
• Visa's Verified by Visa mandate reaches full compliance Oct 24
• South African e‑commerce sees 84% cart abandonment, above global 70%
• Merchants' poor data submission keeps 3DS challenge rates near 80%
• Entersekt reports 60% frictionless checkout while maintaining fraud levels

Pulse Analysis

The latest 3D Secure mandates from Mastercard and Visa signal a shift toward data‑driven risk assessment in online payments. By obligating merchants to transmit detailed transaction fields, issuers can fine‑tune their risk engines, potentially lowering the need for step‑up challenges that frustrate shoppers. The rollout of Mastercard’s Essential Data Requirement and Visa’s full‑compliance deadline reflects industry consensus that richer data, not just binary pass/fail signals, is essential for balancing security with user experience.

In South Africa, the transition has hit cultural and technical roadblocks. Merchants associate 3DS with legacy pop‑up challenges that spike cart abandonment, now measured at a staggering 84%—well above the 70% global norm. Coupled with a skills shortage, many firms lack the resources to integrate the new data fields, leaving issuers with incomplete signals and forcing default re‑authentications. This creates a feedback loop: merchants see higher friction, resist sending data, and issuers cannot reduce challenges, all while CNP fraud accounts for 85.6% of local credit‑card losses, threatening both revenue and liability.

Entersekt’s early results suggest the stalemate is solvable. By partnering with large merchants to automate data collection and feed accurate fields into issuer models, frictionless checkout rates have risen above 60% without a fraud uptick. The industry is also moving toward cloud‑native, managed security platforms that alleviate staffing constraints and enable rapid iteration on 3DS configurations. As more merchants demonstrate tangible approval improvements, the ecosystem can achieve the original 3DS promise: low‑risk transactions flow seamlessly, fraud stays contained, and e‑commerce conversion rebounds.