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Payment Security in the Digital Age
Digital payments in India are growing rapidly, with a year-on-year transactional volume growth of 42% in FY 2023-24, set to triple by FY 2028-29. Achieving a truly digital economy demands payment systems that are both user-centric and inherently secure. The government has promoted the benefits of digital payments effectively through initiatives like Digital India.
However, as digital payments thrive, payment security often gets overlooked. Digital payment frauds in India reached an alarming ₹14.57 billion by March 2024, growing fivefold from previous years. This trend highlights the need for a multi-layered approach to security that involves early user data collection and real-time risk assessment during payment transactions.
The Significance of Early Data Collection
A secure payment system begins with the early collection of user data. By leveraging intelligent data collection practices aligned with the EMV 3DS protocol, payment systems can identify risks before they materialize. Key features like Risk-Based Authentication (RBA) and Method URL enable fraud detection while maintaining operational efficiency.
EMV 3DS and Method URL: Enhancing Online Transaction Security
EMV 3DS is a global security standard aimed at securing card-not-present transactions. With over 16 million credit cards added in FY 2023-24, surpassing the milestone of 100 million cards in force, securing these transactions is more critical than ever. The Method URL, an integral component of the EMV 3DS system, collects additional browser information during the early stages of authentication, allowing issuers to assess payment risks more effectively before approving or flagging transactions.
How the Method URL Process Works
The Method URL process begins when issuers provide a URL alongside their Access Control Server (ACS) link to directory servers. Here’s how it works:
- Integration with Checkout Pages: Merchants embed the Method URL into their checkout pages.
- Browser Data Collection: During a payment transaction, the shopper’s browser sends additional information (e.g., IP address, device type, and operating system) to the ACS.
- Risk Profiling: The ACS uses this data to assess the transaction’s risk level, categorizing it as low-risk, medium-risk, or high-risk, and invoking corresponding security measures.
RBA’s Role in Fraud Prevention
Risk-Based Authentication (RBA) is a cornerstone of modern EMV 3DS protocols, acting as a "smart security guard" that evaluates transaction details and contextual data to assign risk levels. RBA recognizes familiar patterns, flags unusual behavior, and escalates or blocks suspicious activities, ensuring a seamless and secure payment experience.
How RBA Works
RBA employs the following strategies:
- Low-Risk Connections: Recognizes familiar patterns, allowing transactions to proceed with minimal friction.
- Medium-Risk Connections: Flags unusual behavior, requesting additional verification.
- High-Risk Connections: Immediately escalates or blocks suspicious activities.
The Combined Power of RBA and Method URL
Together, RBA and Method URL offer a comprehensive solution for securing digital transactions:
- Early Risk Detection: Real-time data collection via Method URL improves early-stage fraud prevention.
- Context-Aware Authentication: RBA dynamically adjusts security measures based on transaction risk, balancing safety and user experience.
- Smarter Decision-Making: By tailoring security to each transaction, issuers reduce fraud while minimizing customer friction.
Conclusion
Risk-Based Authentication (RBA) and Method URL work hand-in-hand to strengthen payment security. While RBA assesses the risk of each transaction intelligently, Method URL enables early, detailed data collection for accurate profiling. Together, they form a powerful framework for detecting fraud, enhancing user experience, and enabling issuers to secure payments in an increasingly digital world.
About the Author
The author is Animesh Jha, Vice President of Fraud & Risk Management- Wibmo, a PayU company.
Disclaimer
The views expressed are solely of the author and ETCISO does not necessarily subscribe to it. ETCISO shall not be responsible for any damage caused to any person/organization directly or indirectly.
Published On
Apr 24, 2025, at 08:54 AM IST
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