A Guide to PCI 3DS Compliance and Why It Matters

The PCI 3DS Core Security Standard, which builds on the EMV 3DS standard was introduced to mitigate the risk of fraud for businesses handling card-not-present (CNP) transactions. Fraud poses a significant risk and PCI 3DS offers a secure framework for online payments, but what is PCI 3DS, who needs to follow its guidelines, and why is it essential? If you are a issuer, processor or even a card brand, we break it down in this quick guide.

What is PCI 3DS?

PCI 3DS is a security protocol designed to add an additional layer of authentication for card-not-present transactions, while making CNP transactions more frictionless for the consumer. CNP refers to transactions where the cardholder is not physically present, as is the case for online shopping, mobile apps, phone orders, recurring payments, and online invoices. By verifying the identity of the cardholder, it reduces the likelihood of unauthorized transactions and fraud.

When a cardholder starts a transaction, the 3DS protocol prompts them to confirm their identity, often using a password, a one-time code sent via SMS, or even biometric authentication. The “3D” in 3DS represents the three key domains involved in the transaction process:

• Merchant/Acquirer Domain – The business facilitating the transaction.
• Issuer Domain – The cardholder’s bank or card issuer.
• Interoperability Domain – The payment system ensures seamless communication between the merchant and issuer.

 This multi-domain approach ensures every step of the transaction is secure and authenticated.

PCI 3DS vs. PCI DSS: Understanding the Difference

While PCI 3DS and PCI DSS share similar goals of protecting sensitive payment information, they are separate standards designed for different purposes. PCI 3DS applies to environments where 3D Secure functions are performed (3DSS, ACS, and DS) and focuses on authentication, cryptography and sensitive data storage. PCI DSS applies to environments where payment card data is stored, processed, or transmitted (the Cardholder Data Environment or CDE).

For organizations that include 3DS functions within their cardholder data environment, the results of a PCI DSS assessment may fulfill the Baseline Security Requirements of PCI 3DS. These requirements provide general security controls applicable across environments. However, you may still need to implement additional 3DS-specific security measures.

5 Reasons PCI 3DS Compliance is Important (Why You Should Care!)

PCI 3DS compliance is a crucial framework for safeguarding online transactions in a world where digital payments are the norm.

Here’s why it’s important to be compliant:

1. Protection Against Fraud

Online transactions, especially those without a physical card (CNP transactions), are common targets for fraud. PCI 3DS compliance helps protect these transactions by adding an extra step to confirm the cardholder’s identity. This could involve inputting a password, a one-time code, or even biometric methods like Face ID on an iPhone. This added security greatly reduces the risk of unauthorized transactions as well as reduced fraud liability for issuers.

2. Enhanced Data Security

Compliance helps ensure that sensitive cardholder information, like authentication details, is securely encrypted and well-protected. By following strong security practices, businesses can lower the risk of data breaches and protect their customers' information.

3. Building Customer Trust

Customers want to know that their personal and financial information is safe. Achieving PCI 3DS compliance shows that you prioritize their security, helping to build trust and strengthen long-term customer loyalty.

4. Reducing Financial and Reputational Risk

Data breaches can be expensive, both in terms of regulatory fines and the damage they cause to your reputation and relationship with customers. Staying compliant reduces the risk of these incidents and helps to protect your business’s finances and image.

5. Meeting Regulatory Requirements

Payment security rules are strict in many areas, and not following them can lead to fines or even losing the ability to handle certain transactions. PCI 3DS compliance helps you stay on track, keeping your business in good standing with regulators and payment providers.

PCI 3DS Compliance Checklist

To meet the PCI 3DS Core Security Standard, organizations must address the following key areas we have laid out in a checklist below.

Encryption and Cryptographic Key Management

• Use strong encryption for data in transit and storage.
• Implement secure key generation, storage, and retirement procedures.

Secure Software Development

• Adhere to secure coding practices.
• Regularly test software for vulnerabilities and apply timely updates.

Physical and Logical Security Controls

• Safeguard facilities and hardware involved in 3DS data processing.
• Implement role-based access controls and network segmentation.

Network Security

• Deploy firewalls and intrusion detection/prevention systems.
• Restrict system access to authorized users based on business needs.

Data Protection

• Encrypt all sensitive data and limit access to authorized entities.
• Ensure data is used only for its intended purpose.

Logging and Monitoring

• Maintain detailed logs of 3DS data activity.
• Conduct real-time monitoring to detect anomalies and unauthorized actions.

Risk Management and Incident Response

• Regularly review and assess risks to spot potential threats.
• Create and maintain an incident response plan to handle breaches efficiently.

Secure Authentication

• Implement strong authentication methods to verify user identities.
• Protect credentials and authentication data from unauthorized access.

Employee Training and Security Awareness

• Provide training on PCI 3DS requirements and secure data handling.
• Encourage a mindset of security awareness throughout the organization.

Regular Testing and Assessments

• Conduct vulnerability scans, penetration tests, and compliance audits.

For further insight into specific requirements, visit the PCI Security Standards Council for additional documentation.

Making PCI 3DS Compliance a Cornerstone of Your Security Strategy

PCI 3DS compliance is essential for businesses that want to stay competitive, secure, and trustworthy in our current digital economy. These standards help businesses protect themselves from fraud, strengthen customer relationships, and reduce the risk of costly data breaches. Tackling PCI 3DS compliance doesn’t have to be stressful. At CyberGuard Advantage\Control Gap, our specialists are ready to guide you through the process and make compliance manageable. Reach out today to ensure your payment systems are secure and your customers can shop with confidence.