My credit card contract features customers protection against fraudulent use of my credit card. I can use chargebacks to protect me, e.g. in case somebody stole my credit card details.

Recently credit card companies have show great interest in pushing upon / promoting to their customers a new system often referred to as 3D Secure which in case of my VISA contract is named "Verified by Visa".

Reading my contract, it stated that different to the protection I had without the use of that 3D secure system, I can expect problems with chargebacks after fraudulent use.

To me that seems henceforth that this new 3D secure, as in "Verified by Visa", is merely requiring me a less comfortable way of usage. While in case of a hack, leaves me much worse off.

I can completely understand the motivation of VISA and other credit card companies to reduced their expenses related to chargebacks, but I fail to see how there is more "security" gained by me, as in the "Verified by Visa". I have to bear less coverage in case of fraudulent use. Frankly it seems to me "Verified by Visa" is a scheme to shift liability and damage costs from the credit card company to their customers?


3-D Secure (Verified by Visa and MasterCard SecureCode) is a mechanism primarily to protect the merchant, not the consumer.

It is voluntary for the merchants, and many online merchants don't use it. So if you are a criminal with stolen credit card information, you can still use the card number without the 3-D Secure password, you just need to select a merchant that does not use 3-D Secure. Merchants opting in are protected. Consumers that have opted in get some measure of additional protection, as it limits the places that your card can be used without the password, but fraudsters know where the cards can and cannot be used.

Opting in does not change your liability for fraudulent transactions; you still have $0 liability. There is a difference however. When you discover a fraudulent transaction on your account, you notify the bank, and they investigate. These days, this investigation is pretty quick, as fraud happens all the time. If you have a legitimate fraudulent transaction from a merchant you've never purchased from before, it is basically an automatic decision.

However, let's say that you report a transaction as fraud that was a 3-D Secure transaction. When you report the fraudulent transaction, they would see that it was a 3-D Secure transaction, and they would most certainly have more questions for you, as this would seem to be evidence in favor of a legitimate transaction. The bank would probably want to know how the criminal got a hold of your password.

It's the same with a chip transaction. If a chip transaction got reported as fraud, the bank would certainly look at that very closely, as it is supposed to be secure.

$0 fraud liability doesn't change, but 3-D Secure could provide evidence that a contested transaction is legitimate. Among other things, it helps prevent a consumer from committing fraud himself by falsifying a fraud report on a 3-D Secure transaction.

Personally, I have used cards with 3-D Secure/Verified by Visa in the past, but I don't anymore. In my opinion, it is an added inconvenience with little benefit to me. If it were required for all merchants, it might be of more benefit, but since the vast majority of merchants do not use it, it provides very little actual security.

  • My bank requires me to use a Android App as the second factor in 3-D Secure, making a hacking rather likely (considering that misserable state of Android update). A case in which a PIN security, or a 2 factor authentication gets hacked is hence more than nil, making it kind of scare to have the CC company trying to protect themself/merchant. I feel I was better of before 3 D Security – humanityANDpeace Jan 23 '17 at 8:50
  • The problem is that the card issuer often tries to cover their ass... ets. The final paragraphs on this answer is too iffy. This 3-D is a product they want to push onto merchants, and it comes at the expense of the customer. "The bank would probably want to know how the criminal got a hold of your password." - As if passwords were hard to steal. – Mindwin Jan 23 '17 at 11:59
  • Contrast 3-D Secure Transaction with trusted computing. – Mindwin Jan 23 '17 at 12:03
  • @Mindwin I changed the conclusion of my answer a little. Better? – Ben Miller - Remember Monica Jan 23 '17 at 18:16
  • @BenMiller yes. The way it was sounded like it is a deterrence feature – Mindwin Jan 24 '17 at 0:14

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