How to Implement 3DS Authentication for SaaS, Software, and Video Games

Um integrate 3DS authentication into your payment system, you need to integrate a payment solution that supports this protocol, which adds an extra step to online card payments for security reasons.  This is crucial for reducing fraud and complying with different rules, such as the EU’s Strong Customer Authentication (SCA).

This guide offers step-by-step instructions on how to integrate 3DS and enhance your payment processes, which will help you to create a compliant system.

The successful execution of this strategy requires an MoR or a payment processor that is fully compatible with the modern 3DS 2 protocol.

In order to get started, you have to select a suitable global payment partner who is certified to perform the 3DS 2 protocol and also able to fall back to 3DS 1 if necessary. This partner will take over the communication between your SaaS system, the card network, and the card-issuing bank.  Acquiring 3DS may be considered at this stage. Your development team will have to make a decision whether to use a simple Hosted Payment Page, which saves time and money on integration, or a Direct API/SDK Integration, which gives more control over the look and feel of the checkout.

Your partner must be certified and comply with all the EMV 3DS specifications, in this way avoiding complications during the implementation of the security protocol across different card networks.

1. Select Integration Type: The simplest option is to use a Hosted Payment Page, in which the partner handles the transaction processing. If more user experience control is desired, Direct API/SDK Integration can be utilized, providing access to a broader spectrum of Stripe functionalities.  
2. Verify Certification: Ensure that your partner is up-to-date with the latest EMV 3DS specifications. 

The success of the smooth flow depends on the Genauigkeit of the data provided. 3DS 2 requires up to 100 data points to determine the risk, so your system should collect and send this information during each request for the transaction.

It is necessary to put into the checkout system all the necessary fields, which include the IP address, email, and the name of the cardholder, in addition to the necessary contextual data from your systems. Adding such contextual information as the age of the customer’s account or their purchase history helps the bank’s risk engine to approve the payment without further verification.

1. Mandatory Data Fields: Make sure your checkout system is collecting and transmitting all the necessary information, which includes the customer’s IP address, billing address, the full name of the cardholder, the email address, and the phone number.
2. Contextual Data Enrichment: Embed back-end information in the payment request. The risk-based analysis requires access to essential customer data, including:

• • Age/date of creation of the customer account (vital for SaaS tenure)
  • History of previous purchases (a factor in transaction frequency)
  • Device specifications (device ID, browser, screen resolution)

You have to create a plan and include it in your schedule in terms of 3DS performance. The challenge is to reduce customer friction and comply with the rules, which is why it is necessary to consider the risk and the need for each transaction to be performed.

This step is intended to facilitate the “Frictionless Flow” for many valid transactions and initiate the “Challenge Flow” when required for EEA cardholders or in cases of elevated risk. A risk analysis table below can contribute to compliance with applicable rules and may have an impact on conversion rates.

For every transaction, before initiating payment, you should perform a risk assessment using this table:

die Frictionless Flow in 3DS 2 relates to conversion rates through the possible removal of authentication for recognized customers. For SaaS companies, the system should be set up to properly identify renewal payments and thus benefit from the Recurring Payment exemption, a key part of revenue retention. You also need to integrate your checkout with your payment partner’s risk engine so that it is capable of making decisions in real time, which allows the fruition of a frictionless flow when the risk score is low. This high approval rate for low-risk transactions helps in handling the high amount of microtransactions typical for SaaS and Videospiele.

• Subscription Flagging (SaaS Model): For recurring SaaS billing:
  • Flag the first payment as requiring 3DS to set up the Stored Credentials framework.
  • Flag all subsequent, fixed-amount renewals as a “Recurring Payment” to apply for the SCA exemption.

• Risk Engine Integration: Take the time to set up your MoR account with your payment processor so that their risk engine is able to make real-time decisions. The engine should automatically request the frictionless flow when the risk score is low

In cases where a mobile application is used (which is the case in SaaS and video games), the authentication procedure is significant, and a smooth checkout directly impacts conversion. To secure it, you must use your payment partner’s dedicated mobile SDKs for the 3DS process, keeping the customer in your application while being verified. This can reduce the likelihood of the customer being redirected to an external browser, which is sometimes associated with cart abandonment.

In addition, biometric authentication (Face ID, fingerprint) support through the 3DS 2 protocol may offer a comparatively rapid method of identity confirmation and is reportedly common among mobile users.

1. In-App SDK Integration: Use your payment partner’s dedicated mobile SDKs (iOS/Android) to manage the 3DS flow.  This way, the customer will stay within your app during the verification process.
2. Prevent Redirects: The flow should show an authentication prompt that contains the information to be authenticated and the credentials to do so. Avoiding browser redirection for sign-in during the flow may influence purchase completion rates. 
3. Support Biometrics: The 3DS 2 protocol allows biometric authentication (Face ID, fingerprint).  Your payment processing partner has to enable this feature so that customers can authenticate themselves quickly if their bank supports it.

Tipps zur Fehlerbehebung

• Increased Cart Abandonment: To avoid cart abandonment, you can use 3DS 2 to enable the frictionless flow for transactions that present no challenge or too much risk, displaying the authentication prompt only when it is necessary.
• Handling Mobile Display Issues: To optimize the processing of mobile in-app purchases, use dedicated mobile software development kits of your payment provider to embed the challenge process in the app’s webview, away from opening a page that will extend the session inertia.
• Renewals Failing Due to SCA: Consider the case that the billing system does not include the function of tracking recurring payments and to identify alternative ways to handle such cases. If the first payment attempt is also missed, the customer may require an email permission to proceed with the transaction.