Liability depends on whether the operation was confirmed through 3-D Secure. If the buyer passed confirmation at their bank, the fraud risk shifts to the issuing bank. Without confirmation, a disputed operation will most likely be charged back to the merchant.
How it works
- With confirmation. The buyer bank verified the identity, so it answers for a disputed operation.
- Without confirmation. The merchant took the risk, and a dispute returns the money at their expense.
- Exceptions. Some categories and operation types are governed by separate payment system rules.
What it means in practice
- Turning 3-D Secure off for conversion trades a few percent of declines for the full cost of disputes.
- Dispute rates run higher for intangible goods: fulfilment is harder to prove.
- The documents you collected for the order are the merchant only argument in a dispute.
How to dispute a chargeback and what to collect is covered separately.
