Strengthening online payments with 3D Secure: Cape's Commitment to Protecting Cardholder Data

Julian Guppy
June 14, 2023

It's official: cheques are to be phased out in Australia by 2030, whilst physical cash payments are heavily decreasing against the backdrop of digital payments and online transactions skyrocketing to become the norm. So, as cyber threats continue to evolve, safeguarding cardholder data and customer accounts is of utmost importance. With the recent $23.4 million cash injection into cybersecurity as part of the Australian 2023-2024 Budget, there’s never been a better time to talk about, innovate, and adopt digital security measures. As a digital-first platform, we recognise the importance of maintaining robust privacy and data-protection measures for every customer. Keep reading to delve into the concept of 3DS, its benefits, how it works, and how Cape leverages this process. 

Enabling Fraud-Free Transactions with 3D Secure

The primary purpose of 3D Secure is to provide an additional layer of security for online payments, protecting both merchants and consumers. By implementing 3DS, merchants can significantly reduce the risk of fraudulent transactions. These measures not only provide an added layer of protection but also ensure a deeper trust in one’s account integrity and peace of mind for all cardholders, merchants, and card-issuers. 

Here are some key benefits:

  1. Increased Security: 3DS adds an extra step to the payment process, requiring the cardholder to authenticate their identity before completing the transaction to prevent the unauthorised use of credit or debit cards.
  2. Liability: When transacting with 3DS authentication in place, the onus for any fraudulent charges falls from the merchant onto the card issuer or bank, protecting them from fraudulent transactions.
  3. Business cardholder confidence: By implementing 3DS, merchants and card issuers such as Cape demonstrate their commitment to protecting customer data and ensuring secure transactions. This builds trust and confidence amongst our business cardholder customers.

How do I know if a merchant requires 3DS? 

Merchants will indicate whether they require 3DS authentication during the checkout process. When making an online payment, you may encounter a pop-up or redirection to another page. This helps authenticate your identity and ensure the transaction is from you and not a fraudster.

How does Cape employ 3DS? 

Every single Cape card leverages 3DS through our processing provider, Thredd, and their use of Cardinal Commerce, which provides real-time 3DS enrolment and an authentication service known as Real-time Data eXchange (RDX). Through Thredd and our partnership with Mastercard and Mastercard SecureCode / Mastercard Identity Check, we ensure that you and your employees that are Cape cardholders are secured and authenticated via a range of various authentication factors. Read below to learn how these work.

How does 3DS work? 

Thredd offers multi-faceted forms authentication with specific factors. These fall under two umbrella terms: Risk-Based Authentication and Strong Customer Authentication:

  1. Risk-Based Authentication (RBA): RBA assesses the risk associated with a transaction based on factors like transaction amount, merchant reputation, and the customer's spending patterns. If the transaction is deemed low risk, it may proceed without additional authentication steps. 
  2. Strong Customer Authentication (SCA): SCA is a more robust form of authentication that involves two or more independent authentication factors. These can be something you know, also known as Knowledge Based Authentication (KBA), (e.g., a password or security question), something you possess (e.g., a mobile device using a one-time password (OTP) or in-app verification), or something inherent to the customer (e.g., biometrics like fingerprints, or facial or voice recognition). SCA is mandatory for higher-value or high-risk transactions.


3D Secure is crucial to securing online payments in this digital age, so card-issuers like Cape can offer increased security, liability protection, and improved consumer confidence. As more merchants mandate 3DS authentication during checkout processes, this helps verify the cardholder's identity and protect against fraudulent transactions. With the two main methods of authentication, Risk-Based Authentication (RBA) and Strong Customer Authentication (SCA), implementing 3DS can help foster a safer online payment experience for all stakeholders and ensure peace of mind for all.

We know how important security is online. That’s why all Cape cards come with 3D Secure enabled out of the box. Which means that you can stay focused with building relationships with your customers while we focus on keeping your funds safe. 

If you want to find out more about the features Cape offers then book a demo with us.

Julian Guppy
June 14, 2023