2D vs 3D Payment Gateway: What Should You Choose?

3 min read

Did you know that losses due to online payment fraud globally are projected to exceed $343 billion by 2027? That’s a scary number, especially if you’re a new business owner. While you want to provide an easy checkout experience for your customers, protecting against online fraud is equally crucial. So, what’s the solution? Enter 2D and 3D Payment Gateways. We’ll break down the basics and help you determine which is right for you. 

But before we delve deeper into 2D and 3D payment gateways, let’s understand what a payment gateway is. A payment gateway enables you to accept payments from your customers, acting as a bridge between your website/app and your customer’s bank, ensuring safe and secure transactions.

What is a 2D Payment Gateway? 

Let’s imagine stepping into your customers’ shoes for a moment. Meet Rohit, who visits your website and selects the product he wants to purchase. As he goes through the checkout process and chooses to pay with his credit card, he enters his card details – the card number, expiry date, and CVV. With a simple click on ‘Pay Now’ after providing his CVV, the transaction is completed. This is what a 2D payment gateway does.

Now, let’s explore how a 2D payment gateway benefits your business.

Faster Payment Processing

With 2D payment gateways, transactions are authorised and settled almost instantly, minimizing the waiting time for payment confirmation and speeding up the shipping or delivery process.

Improved Customer Experience 

Offering a variety of payment options, including card payments enhances convenience for your customers,  This flexibility leads to a better shopping experience, higher customer satisfaction, repeat business, and increased loyalty.

What is a 3D Payment Gateway?

Now, let’s look at the same example, but with a 3D payment gateway, Rohit would receive an OTP after entering his card details. This enhances security with an additional layer of authentication, processing payments only after the user provides an OTP during the authentication step.

Now, let’s explore the key advantages of a 3D payment gateway:

Enhanced Security

3D payment gateways use advanced security measures like two-factor authentication (2FA) to improve protection against unauthorised access and data breaches.

Reduced Fraud Risk

3D secure payment gateways significantly decrease the likelihood of fraudulent activities by confirming the cardholder’s identity during transactions and safeguarding your customers’ data.

Improved Customer Trust

The additional security layer assures your customers that their financial information is secure, building trust and confidence in your business.

Regulatory Compliance

3D secure payment gateways adhere to various financial regulations and standards, such as the Payment Card Industry Data Security Standard (PCI DSS), ensuring compliance with legal and industry requirements.

Which Payment Gateway Should You Choose for Your Online Business?

3D payment gateways are considered better than 2D payment gateways due to their advanced security features. These gateways offer an additional authentication layer, such as OTPs and two-factor authentication (2FA), significantly reducing the risk of fraudulent transactions. 

The additional security layer builds trust and confidence in your business by assuring customers that their financial information is secure. On the other hand, 2D payment gateways prioritise simplicity and a streamlined checkout experience but lack the added security measures of 3D gateways, making them more vulnerable to fraud and chargebacks.

Read more: How to Start an Online Business from Home

The choice between 2D and 3D gateways ultimately depends on various factors such as your business model, target audience, transaction volumes, and risk tolerance. If your business deals with digital goods or operates in high-risk industries, you may benefit more from the enhanced security of 3D gateways, while 2D gateways may be suitable for low-risk businesses prioritising a frictionless customer experience.