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3d secure payment authentication market

3D Secure Payment Authentication Market Share, Size, Trends, Industry Analysis Report, By Component (Access Control Server, Merchant Plug-in, and Others); By Application; By Region; Segment Forecast, 2023 - 2032

  • Published Date: Jan 2023
  • Pages: 119
  • Format: PDF
  • Report ID: PM2998
  • Base Year: 2022
  • Historical Data: 2019-2021

Report Summary

The global 3D secure payment authentication market was valued at USD 1.12 billion in 2022 and is expected to grow at a CAGR of 12.0% during the forecast period.

The growing popularity of 3D secure payment authentication due to its ability to provide a wide range of client benefits including reducing the risk of card payment fraud and implying a safe authentication step before customers go and shop online is a key factor influencing the growth of the global market.

3D Secure Payment Authentication Market Size
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In addition, the growing implementation of 3D secure payment authentication across several eCommerce platforms due to a rise in the online shopping trend, as a result of a rapidly increasing number of smartphone users, easy availability of fast internet facilities, and various benefits offered by these online platforms, are likely to positively impact the market growth.

For instance, there are more than 5.07 billion people worldwide using internet, which equals nearly 63.5 percent of world’s total population. The number of internet users is continuously growing, the world’s connected people has grown by over 170 million from October 2021 to October 2022. Now, fewer than 3 billion remaining, who are not connected to the internet with a majority from Southern and Eastern Asia and Africa.

Furthermore, the proliferation of 3D secure payment authentication is growing rapidly, as it allows users to choose any type of medium including mobile, tablet, and desktop for processing their online transactions without a need to compromise the security of their card details, which further bodes well for the industry growth.

For instance, in May 2022, ENTERSEKT entered a strategic partnership with the Capitec Bank. The partnership has been performed to aim at the EMV 3D Secure Solution to enhance the safety and security of eCommerce payments while reducing the friction of cardholders.

However, lack of standardization and automation across various intra-bank and inter-bank networks among nations and growing cross-border payments around the world are major key factors hampering the growth and adoption of 3D secure payment authentication systems.

The outbreak of the COVID-19 pandemic has significantly impacted the growth of the 3D secure payment authentication market. The rapid emergence of deadly viruses disrupted almost every aspect of the eCommerce industry and resulted in a high spike in the number of fraud scams experienced by various consumers and even businesses. According to Federal Trade Commission, consumers in the United States lost new about USD 246 million in the year 2020 due to various online shopping frauds.  

Industry Dynamics

Growth Drivers
The continuously growing number of fraudulent online activities related to financial services, such as unauthorized access or use of cards and identity fraud, is a key factor fueling the demand and implementation of 3D secure payment authentication across the globe. With the rapid development in payment methods, rising e-commerce use, increased broadband access, and introduction to new and advanced technologies, cashless payment is growing drastically and further increases the need for improved 3D authentication systems worldwide.

According to Indian Government Cybercrime Department, there were around more than 61,000 complaints of digital payments frauds received from government in the month of May 2022, and more than half of these frauds were related to UPI activities.

Moreover, a rapid surge in the adoption of various types of 3D payment secure platforms in the hotel industry, as most of the hotels and tourism centers have started accepting online transactions and payments for a variety of services including room reservations, food ordering, and many others are expected to boost the growth and demand of the market during the anticipated period.

Report Segmentation

The market is primarily segmented based on component, application, and region.

By Component

By Application

By Region

  • Access Control Server
  • Merchant Plug-in
  • Others
  • Banks
  • Merchants & Payment Gateway
  • North America (U.S., Canada)
  • Europe (France, Germany, UK, Italy, Netherlands, Spain, Russia)
  • Asia Pacific (Japan, China, India, Malaysia, Indonesia, South Korea)
  • Latin America (Brazil, Mexico, Argentina)
  • Middle East & Africa (Saudi Arabia, UAE, Israel, South Africa)

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Merchant plug-in segment accounted for the highest market share

Merchant plug-in hold the largest share owing to their growing importance and need for the verification of credit and debit cards and performing 3D secure payment authentication. The extensive rise in the adoption of merchant plug-ins across various companies and high implementation of the introduction of new and more developed solutions by key companies are fueling the segment growth.

Moreover, the access control server segment is expected to grow at the fastest CAGR during the anticipated period. Increase in the need for identity verification during the process of digital transactions and its capabilities to add next level of security to credit card transactions by validating cardholder identity with a personally determined password. The major companies providing access control server solutions around the world are Worldline, AsiaPay Technology, and GPayments Pty. Ltd. which are further developing new technologies in these solutions to enhance consumer experience and safety.

Merchants & payment gateway segment is expected to witness fastest growth

The merchants & payment gateway segment is expected to register high growth over the coming years, which is mainly driven by its increasing prevalence to help merchants and payment processors to reduce and minimize fraud and chargebacks, enhance confidence of cardholders, and increase online business. In addition, the development of 3D secure payment technology through upgrading it to 3D secure 2.0 to decrease the rates of card abandonment is propelling segment market growth.

Furthermore, the banks’ segment held the largest market revenue share in 2022 and led the industry due to continuously increasing digitalization across the BFSI sector, especially in developing countries such as India, China, and Brazil. Additionally, such payment authentication enables banks & financial institutions to go for customers’ transaction history & their history to provide information related to user devices and transaction locations, which is crucial.

North America region dominated the global market in 2022

North America dominated the market and accounted for a healthy market share. The growth of the regional market can be attributed to significant growth in the adoption of these solutions among various banks and financial services-related companies coupled with the surge in the number of online transactions due to the emergence of shopping through various online channels, to prevent Card Not Present fraud mainly in countries like United States and Canada. For instance, around 7.9 million people were victims of CNF fraud in 2018 in the United States, which represents over 3.1% of US total population aged over 18 years of age. CNP frauds accounted for 79% of total value of card fraud in 2018 with a total loss of USD 2.17 billion.

However, Asia Pacific region is expected to expand fastest at a CAGR during the projected period, which is accelerated by the rising population and adoption of CNP across various countries for processing contactless payments. Furthermore, higher advancements and increasing investment in research & development activities to develop more innovative security solutions by key market players and governments as well driving the growth of the market in the region.

Competitive Insight

Some of the major players operating in the global market include GPayments Pty, Broadcom Inc., Mastercard, Visa Inc., Bluefin Payment, American Express, RSA Security, Decta, Modirum, Marqeta, Cardknox Development, Discover Financial Services, ENTERSEKT, and Finserv.

Recent Developments

In January 2022, Everlink launched its new 3D secure authentication service through Visa Consumer Authentication Service for both Mastercard and Visa products. It includes various advanced features including less risk of online cart abandonment, higher transaction volume, and reduction in the number of fraud losses, and provides higher flexibility to adjust and

In September 2021, Cardknox Development announced that they have started supporting EMVco’s 3D Secure technology. 3DS2 validates card-holder identities in real-time, minimizes various chargebacks & frauds, and provides an enhanced and improved customer experience.

3D Secure Payment Authentication Market Report Scope

Report Attributes

Details

Market size value in 2023

USD 1.25 billion

Revenue forecast in 2032

USD 3.49 billion

CAGR

12.0% from 2023 – 2032

Base year

2022

Historical data

2019 – 2021

Forecast period

2023 – 2032

Quantitative units

Revenue in USD billion and CAGR from 2022 to 2030

Segments Covered

By Component, By Application, By Region

Regional scope

North America, Europe, Asia Pacific, Latin America; Middle East & Africa

Key Companies

GPayments Pty Ltd., Broadcom Inc, Mastercard Incorporated, Visa Inc., Bluefin Payment Systems LLC, American Express Company, JCB Co. Ltd., RSA Security LLC, Decta, Modirum, Marqeta Inc., Cardknox Development, Discover Financial Services, ENTERSEKT, Fiserv Inc., and SIA S.p.A.

Key Take-Away
Polaris Market Research
3D Secure Payment Authentication Market Size & Share Global Analysis Report, 2023-2032