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Click to Pay is On The Way.  Here’s Why That Matters.

May 24, 2024

Integrating 3DS while accepting payments can create user friction. Click To Pay offers an alternative to needing a separate 3DS integration.

When we discuss network tokens, a discussion on 3DS typically isn't far behind. Merchants rightly see network tokens as a way to mitigate fraud risks, and 3DS has been one of the long-established and required ways to achieve this. That said, both Visa and Mastercard have leaned into offering Click-to-Pay to take advantage of Network Tokens alongside 3DS.

If you are in Europe or APAC, Click To Pay is the solution for the future.

3DS Background

So, why do merchants still adopt 3DS? Two reasons:

  • Liability Shift to Issuers
    • When a cardholder's transaction is successfully authenticated using 3DS, the liability for fraud typically shifts from the merchant to the card issuer.  This is a powerful financial incentive for merchants since the issuer would bear the financial responsibility for the excessive chargebacks or other types of fraud, not the merchant.
  • Compliance with Regulations
    • For merchants operating in regions with stringent security regulations (PSD2), like Europe, 3DS helps ensure compliance with strong customer authentication (SCA) requirements.

3DS is an authentication protocol designed to reduce fraud and increase consumer confidence in e-commerce. While it is a great tool to enhance the security of online card transactions by providing an additional layer of authentication, it also adds to user friction, which could lead to potential card abandonment. New versions of 3DS aim to mitigate this with better user interface design for a more seamless checkout process and adaptive multi-factor authentication (MFA) with biometrics and one-time passwords (OTPs). However, challenges persist.

Merchants and payment gateways must contend with the technical implementation and maintenance complexity needed to ensure proper implementation of the 3DS protocol by updating their systems, processes, and integrating with the card networks. Merchants also face the burden of continually educating their users about 3DS security benefits while attempting to reduce the friction caused by the traditional 3DS user experience.

The Click to Pay User and Merchant Experience

Click To Pay is expected to enable FIDO-based biometric authentication and fits a tech-forward philosophy. It prevents the multi-hop product integration that adding traditional 3DS to your technology stack would entail, especially if you plan to offer Click to Pay anyway.

User Experience

User Experience

Click to Pay offers a smoother user experience at initial purchase and beyond.

Instead of manually adding card details, answering a challenge question, pulling out of the purchase flow to get an OTP and then coming back to type that in, the CTP user experience is much slicker. Consumers use their email address or phone number to see a list of cards, pick one, and verify their identity and authorize transactions with an an OTP or biometrics such as a FaceID or fingerprint scan.

There is no longer a need for passwords or identity confirmation calls or texts from the financial institution after the transaction.

User Journey User Journey
Merchant Data Security and Liability Shift

Merchant Data Security and Potential Liability Shift

From a security perspective, Click To Pay incorporates data security by adding tokenization and encryption. While tokenization replaces sensitive data with a randomized token, encryption keeps data safe during transactions and offers protection against breaches. Payment data is processed using network tokens, and , soon, we expect biometric authentication will be embedded in Click to Pay instead of requiring a separate integration.

When merchants use network tokens and biometrics together, the authenticated transactions are PSD2-compliant and mitigate fraud for issuers. In addition, given the networks' efforts to support issuer authentication in new ways, we expect a liability shift from merchant to issuer to follow shortly.

As one of the few providers globally with direct integrations to Visa and Mastercard and a track record of storing 3 billion randomized tokens to replace sensitive data, VGS is the most effective way for merchants to add network tokens to their payment infrastructure.

More Conversion

More Conversion

Lower-friction Click-to-Pay transactions benefit merchants by increasing transaction volumes and improving customer perception. According to Mastercard, there is a 93% conversion rate of returning CTP users on a trusted device. The more convenient Click-to-Pay experience streamlines the purchasing process and could lower cart abandonment rates, a perpetual consideration for online merchants. A better experience can lead to both higher conversion and more repeat buyers.

Plus, the benefits of this experience multiply because “recognized users” persist across all merchants that enable Click to Pay. In other words, merchants benefit not only from the cards on file in their own user flow, but also see cards on file from incremental users across other merchants that have been added to Click to Pay. Merchants are essentially acquiring new consumers simply by integrating Click to Pay.

Beyond purchases, Click to Pay systems can offer valuable information on customer buying behavior, leading to more targeted marketing and loyalty programs. A faster and more streamlined checkout experience is attractive across industries and regions, creating the potential for richer data sooner.

Adding Click to Pay as a payment option now will ensure you are ready for the future. Integrating Click to Pay with VGS boosts security, enhances the user experience, and streamlines operations by:

  • Enhancing user checkout experience with 50% shorter checkout times to improve conversion rates and reduce checkout times by 50% to simplify and secure the payment process.
  • Authenticated transactions for merchants with potential liability shift: CTP transactions will be supported by new authentication technologies like Passkeys. We also expect liability shift to issuers will come soon, making Click to Pay a key payment method starting with EU and APAC and expanding to other regions. Increased authorization rates and reduced fraud: Combining network tokens and biometrics or OTP on Click to Pay optimizes security and performance while reducing the fraud risk.
  • Enabling infrastructure flexibility and compatibility across various payment processors and systems by being network token- and processor-agnostic.

Contact Us

arvind-headshot-blog Arvind Santhanaraman

Head of Payment Products

Senior Director of Product Marketing Khyati Srivastava

Sr Director, Marketing


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