Difference Between 2D and 3D Payment Gateway
The use of a payment processor is vital for all modern and traditional businesses as they search for ways to enable consumers to conduct online transactions. The best payment method should be selected if you are planning to initiate the payment process via your app or website.
Understanding the payment methods, their operations, and the security system will assist you in choosing the right payment gateway. Making an informed decision is easier when you are aware of the distinctions between two types of payment gateways: a 2D or a 3D gateway.
What is a Payment Gateway?
Payment gateways are a channel that connects your bank account to the site where the funds must be sent. The software of a payment gateway allows users to conduct online transactions with various payment options.
It is an external third party, that safely transfers funds from your bank accounts to the retailer’s website. The bank and the parties are required to be authenticated.
Many people know about the concept of a payment processor, but do not know the extensive array. A payment gateway is a surveillance system and a compliance procedure that provides strong encryption of data to guarantee secure data during the transactional process between two parties.
The payment gateways are classified as 2D (2 dimensions secured) and three-dimensional (3 dimensions secured). Let us walk you through the differences between these two in order to help you determine which one is the best option for your company.
What is a 2D Payment Gateway?
The payment method that does not have OTP or security checks is referred to as a 2D gateway. The user inputs basic card information such as the card numbers, expiry dates, and the name of the cardholder into the secure payment gateway that is 2D-secured. After that, they input an authentication code, as well as CVV(Card Verification Value) on the back of the card.
The payment is verified when the data is properly entered. The payment gateway of the processor doesn’t require further verification or authentication. The operation of the 2D Payment Gateway with no OTP (One Time Password) is less secure.
Transactions made through an online payment processor are less secure because of the absence of a final verification by the acquiring bank. While 2D transactions employ various methods to ensure the security of payments but hackers are more likely to interfere.
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Features of a 2D Payment Gateway
The program that handles payment transactions is called 2D Pay Gateway. Customers are able to pay without providing a one-time password or security code. It simply requests the information for the credit card as well as the expiration date. The transaction is completed once the consumer completes the information. Customers can pay for their purchases without having to submit a one-time password or enter the security code.
In essence, it only needs debit or credit card information. The transaction is completed once the cardholder inputs the information.
To understand the workings of a 2D Payment Gateway We must be aware of how it operates.
This is the process to complete a transaction with an online payment gateway that is 2D:
- The customer visits an online store and purchases an item or service. They select a payment method and provide their debit or credit card details at the time of checkout.
- The data is gathered through a gateway, which encrypts and sends an authorization message to the buyer.
- The acquirer makes an application to the processing (Visa, Mastercard, or another) that is responsible for the cardholder.
- The card’s operator calls the bank that issued the card to determine whether or not the credit card issued is valid and if there is enough cash to be withdrawn.
- The seller accepts the transaction and is then sent a verification to the buyer’s bank through the gateway. A successful purchase on the internet is reported to the customer through the payment gateway.
What is a 3D Secure Payment Gateway?
A 3D payment gateway functions in the same manner as a 2D payment processor. However, it comes with an additional verification procedure which increases the security of online transactions. Prior to the transaction being debited from the account of the cardholder in online transactions, it is when an OTP will be generated.
An OTP is a code composed of random digits which are sent to the phone of the cardholder via SMS, soft certificates or email when an additional transaction is required. The OTP generally lasts up to 30 seconds depending on the service provider and the type of service. This added layer of security differentiates 3D and 2D banking transactions.
There are two types of 3D payment Gateways.
The various types of 3D Payment Gateways include:
3D Secure 1
The initial version of the 3DS protocol was 3DS1 (3D Secure 1). At the time that 3DS1 was first released, users used computers to pay online. 3DS1 was able to support Desktop authentication using a browser. Although it did have some limitations, however, it was a security feature and protection from fraud. When the 3DS1 came out there was no use for smartphones and mobile applications. The 3DS1’s design didn’t allow for mobile phones Payment Gateway.
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When the first customers began using their mobile phones for online buying, they ran into issues using 3DS1. It was unable to enable the mobile app to perform in-app payments. This meant that a lot of online shopping carts were unable to be used. In addition, for cards with 3DS1 capabilities, certain banks were required to provide the use of a password that was static. These issues caused friction during the payment process on the internet.
3D Secure 2
3DS2 is a better version of 3DS1 and comes with a lot more security and comfort. Not just is 3DS2 have a different look and feel from 3DS1 and 3DS1, but it also comes with a unique message exchange system and message format. It also has a variety of features for data analysis as well as 3DS2 is a better user interface.
3DS2 offers an identical experience, regardless of the device that is used by users. It’s a good fit with retailers that accept online transactions through payment gateways. 3DS2 collects more information than 3DS1 and operates within the legal framework. Data exchange that is more meaningful aids in the detection of fraudulent transactions. Many authentication steps are executed behind the scenes using the 3DS2 protocol. This helps reduce friction during transactions.
Features of 3D Payment Gateway
The mechanism used to operate the working mechanism of a 3D Payment Gateway is different from that of a 2D payment Gateway.
The following are the characteristics of the 3D payment gateway:
- Customers choose the product or service they wish to purchase and provide their credit or debit card details.
- Let’s say you’re a retailer with the option of 3D Secure Payment. In this scenario, customers will be presented with a pop-up window. The bank will ask for a unique authentication code to verify their identity. This code only works only once, and it is usually transmitted to the user’s mobile phone via SMS.
- It will then be approved and the transaction is completed when the coupon is correct.
- The consumer should be aware of the three chances to examine a transaction prior to it being denied and their credit card is held until they contact their bank of issue.
In comparing the advantages and disadvantages of 2D or 3D gateways and integrating the latter, it is safer and more beneficial. 3D payment gateways encourage clients to purchase because it reduces the risks of international and domestic transactions. The 3D Payment Gateway Solution provides comfort to the company and to the consumer by ensuring a secure and safe transaction. The customer can safeguard their money and prevent fraud, while company owners can see a reduction in fraud and chargebacks.
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