How to create smarter fraud protection at checkout with an integrated approach

At its core, Payer Authentication is a data-driven, network-agnostic solution built on the EMV® 3-D Secure¹ (3DS) protocol. It helps merchants secure online transactions through a single integration, supporting all major card brands, while maintaining a smooth experience for legitimate customers.

Here’s how authentication works:

• A customer clicks “buy” and submits their payment credentials. The merchant’s payment gateway then instantly sends an authentication request, with device and contextual data, to the customer’s bank (the issuer).
• The bank, which has its own risk evaluation technology, will then respond with a signal that authentication was successful, needs a verification challenge, or failed.
• Visa’s network facilitates this secure data exchange, using global data and AI to evaluate the transaction’s risk in real time.
• In most cases, the issuer’s systems decide the transaction is low risk and no extra action is required from the customer. In those cases, the authentication passes silently (via a 3DS flow), and the checkout proceeds directly to authorization. 
   

So, legitimate customers experience a normal, uninterrupted purchase. 

However, if the issuer flags the transaction as unusual or high-risk, it triggers a step-up challenge before authorization to confirm the customer’s identity:

• The customer might be prompted to enter a one-time passcode sent via SMS, or to verify a fingerprint/face ID in their banking app, or another verification method supported by the issuer. This real-time challenge helps ensure the person attempting the purchase is the legitimate customer before the payment is approved.
• Once the customer successfully completes any required verification, the issuer returns an authentication result to the merchant. If authentication is successful, the transaction proceeds to authorization, now confident that the customer is legitimate. 
• If the authentication fails or isn’t completed, the transaction is declined prior to authorization, preventing a likely fraud attempt from ever being charged to the card.
   

Throughout this process—which happens in mere milliseconds—Visa’s network facilitates this secure data exchange, using global data and AI to evaluate the transaction’s risk in real time.

With Payer Authentication, merchants enjoy a few core benefits that help shield revenue and protect the customer experience:

Reduce fraud and chargebacks: Authenticating customers before authorization helps block many fraudulent transactions at the source. That means fewer chargebacks—and fewer losses and fees. 

Reduce liability: When authentication is successful, fraud liability often shifts from the merchant to the issuer. If fraud slips through, merchants may not be financially responsible. 

Improve customer trust: Payer Authentication adds security without slowing down checkout. Most customers won’t even notice it, but when needed, quick branded challenges reassure them. The result: fewer false declines, smoother approvals, and stronger loyalty.

Simplify compliance: In regions governed by mandates like Europe's Strong Customer Authentication (SCA), Payer Authentication enables two-factor authentication, helping ensure merchants remain compliant without impacting the flow of business.

While many fraud prevention measures are applied after a transaction has been completed, Payer Authentication takes a proactive approach to detecting and preventing fraud prior to authorization. This early intervention is vital in today’s payment environment, where attacks are increasingly sophisticated and can occur at high volumes. 

With authentication, merchants can confirm a customer’s identity before authorization, greatly reducing the likelihood of losses due to unauthorized transactions. 

This approach also helps lower the operational burden by helping to minimize disputes and chargeback investigations, while producing valuable data that can be used to continually refine and strengthen fraud strategies. 

In effect, Payer Authentication serves as a front line of defense, helping to keep fraudsters out and good customers in. 

Payer Authentication is powerful on its own but gets even more impactful when paired with Decision Manager.

Decision Manager is an advanced, AI-driven fraud management solution that uses global data, anomalous behavior insights, and customizable rules to evaluate the risk of each transaction, automating decisions in real time. 

When used together, their true power lies in the full flexibility to tailor a risk strategy to your specific needs and risk appetite. 

The tools work together to enrich data for smarter decisions: 

1. Payer Authentication verifies the customer’s identity, providing a clear authentication response signal from the card issuer. 
2. This signal is then fed directly into Decision Manager, becoming a critical input for its advanced AI risk model. 
3. The model then analyzes this signal, alongside hundreds of other variables like device reputation, behavioral data, and global transaction patterns from the Visa network to generate a single, comprehensive risk score.
    

This combination of data empowers merchants to define their own strategy using Decision Manager's highly configurable rules engine. 

By combining the Payer Authentication result with the AI risk score, merchants can create outcomes that perfectly match their risk tolerance. 

For example, a merchant focused on growth could write a rule to automatically approve any transaction that receives a successful authentication, trusting the bank's verification to reduce false declines and maximize sales. 

Conversely, a merchant with a more risk-adverse strategy might configure a rule to send a transaction to manual review if it was authenticated but still receives a high-risk score from the AI model. This level of control allows merchants to fine-tune the balance between security and customer experience so the system is customized to their needs. 

Fraud is an inevitable part of digital commerce—and the right tools will help you intelligently manage risk without disrupting the customer experience.

With Payer Authentication and Decision Manager working together, you can get a unified defense that helps detect fraud sooner, approve more good transactions, and deliver a more secure, consistent customer experience.

In the digital economy, trust is currency. With the right strategy, you can protect that trust—transaction by transaction.