2D payment gateway
What is 2D payment gateway and how does it work
Many customers and merchants have only heard about 3D secure technology in online debit/credit card transactions. But there is also another type of payment gateway called 2D secure. Before we dive into the differences between these two concepts, let's find out what a payment gateway is and what function it performs in online transactions.
Payment gateway is software for processing all kinds of online payments. It is responsible for the safe transferring of payment data between all processing participants. With the help of encryption, the payment gateway protects the sensitive data that a buyer enters during the checkout and then transmits this data for further processing.
Here’s how it looks:
- A customer selects a product or service on a merchant’s website and initiates payment. They choose a preferred payment method and enter debit/credit card details on a checkout page.
- A gateway receives the information, encrypts it, and sends an authorisation request to the acquirer.
- The acquirer sends a request to the card network (Visa, Mastercard, or other) serving the cardholder.
- The card network contacts an issuing bank to check if the card is valid and if there’re enough funds to withdraw.
- The issuer authorises the transaction and sends a confirmation to the acquiring bank via a gateway. The payment gateway informs the customer of a successful online transaction.
Payment gateways allow merchants worldwide to accept and process electronic transactions via multiple methods and any currency. As more and more people are opting for cashless payments, the integration of an efficient processing solution has become a necessity rather than an advantage.
The abbreviation 2DS stands for 2 Dimension Secure, a type of payment gateway that processes transactions without additional authentication. 2D payments are also called “non-3DS”, but this does not mean that transactions through them are unsecured. Let’s find out what is the difference between 2D and 3D secure.
What is the difference between 2D and 3D secure
In fact, there’s only one difference between 2D and 3D transactions. A 2D secure payment gateway allows customers to pay for goods or services without additional authentication. The customer only needs to enter their card number, expiry date, and CVV code on a checkout page, and the payment is complete. In turn, the 3D payment gateway operates with an additional verification layer — OTP (One-time Password), which is sent to the buyer via SMS or inside the banking application. Typically, 2D processing involves two participants — customer and merchant. In the case of 3D transactions, there are three parties involved: customer, PSP, and merchant.
If a payment gateway does not apply 3D secure technology, then it can be categorised as 2D. Such payments do not require additional confirmation like OTP when making, providing faster and more convenient authorisation to clients. However, the 3D payment gateway proceeds the online transaction with SCA (Strong Customer Authentication), ensuring more safety for cardholders and mitigating the risk of fraud. Given the increasing level of global e-commerce fraud, such a lack of security makes merchants wonder if it is safe to approve transactions without additional password. We hasten to note that the integration of a solution without extra authentication increases the risks of data leakage and fraud, which, as a result, can lead to security problems and financial losses. That’s why 3DS is a better option.
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Who needs a 2D payment gateway
Basically, a 2D payment gateway is suitable for any international and local merchant regardless of the type, size or industry. According to the latest research, more than 40% of customers cancel their purchase if the checkout process is tedious or complex. In order to eliminate potential problems and make transaction processing as smooth as possible, many businesses choose to connect 2D payment gateways. You may also need a 2D gateway provider if your business belongs to a high-risk category, as it significantly reduces the hassle of establishing partnerships with acquirers.
Benefits of 2D payment gateway for business
- Fast application approval
- Ease of integration
- International reach
- The ability to accept multiple currencies
- Best fit for high-risk businesses
How to integrate a 2D payment gateway
Regardless of the country, currency, and industry, every business owner aims to create a smooth and secure shopping experience for their clients. To start accepting online payments without problems, you first need a merchant account where all the money goes after the transaction is completed. However, it’s difficult to predict whether your merchant account application in a bank will be approved and how long the acquirer will consider the request. Banks usually prefer not to cooperate with high-risk businesses or startups to avoid possible problems or chargebacks. Suppose you have not succeeded in opening a merchant account in the bank, or you want to speed up this process significantly. In that case, you can easily integrate payment processing solution into your business website, application, or both with the help of a third-party payment service provider. It usually doesn't take long to connect 2D payment gateway into an e-commerce website if you partner with a reliable payment partner like Corefy. Our feature rich platform enables various e-commerce businesses to accept payments from clients all over the world, avoiding unnecessary costs and effort.
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