> 3-D Secure is a protocol designed to be an additional security layer for online credit and debit card transactions.
3DS on every transaction is definitely frustrating; 3DS on no transaction just shifts the friction elsewhere.
I get a popup on my phone via the issuers app
CONFIRM DENY
This is online only. On site payments of ca. 100$ or less are tap and done. For higher value transactions a PIN is required.
More practically: this is still a dispute process. You still have to fill in forms, you still temporarily don't have your money, you still might not get it back. Why take that risk when you could just have a popup on your phone that you click "allow" on? 15 seconds max.
Regarding your last question, about the 15 seconds friction, you should work for a bit in online commerce to see how fast people give up paying if there's even a little inconvenience in the checkout process and go somewhere else they perceive it makes their shopping experience easier. The biggest drop in conversion rates happens at the checkout stage.
Both chargebacks and zero liability are practically available on effectively all US debit cards.
Legal protections might be a bit less than for credit cards, but still far from “you have the burden of proof”.
Actual dispute resolution can take quite long and you’re not even directly dependent on the outcome. For example, if you lose a card and it gets used in a physical store fraudulently, your bank will most likely not be able to win a dispute, but they’ll usually still have to reimburse you.
The thing that matters to you as the cardholder is only fraud liability; if and how your bank is made whole by the merchant is their concern. That’s the same across credit and debit.
In Europe, 3D Secure (when it is used) is used when you pay with both credit and debit card. From a transactions point of view there is no difference between a credit and debit card.
From a technical perspective you are right - it is a transaction, but from a dispute perspective it matters a whole lot, so it is actually more convenient for Americans to use a credit card with no second factor authentication than go through the hassle of being asked for a code or whatever second factor the bank decides to use.
(probably somewhere in https://en.wikipedia.org/wiki/Payment_Services_Directive )
That's usually handled with an app on your phone and is pretty much frictionless.
This is not a win for the customer, btw, because the credit card fees get baked into the prices.
Yes, I’m willing to pay $100 for a liter of water if you’re the only one selling it. I get a lot of value out of it!
In a competitive market, competition eventually drives down prices to a price that somewhat approaches the cost of providing the service.
This isn’t happening in payment, due to insurmountable network effects.
3D Secure and other technologies are pretty inexistent because people pay with credit cards and not debit cards. Credit cards have a very simple process of disputing transactions, fraud insurance and other things, and by moving the risk to the bank/merchant, they eliminate the friction that comes with using 3D Secure and other multi-factor authentication solutions. Win for the customer.