Why Your 3DS Authentication Has Low Approval Rates: 5 Optimisation Tips

If your 3DS approval rates are lagging, you’re losing revenue to unnecessary declines and abandoned carts. Low success rates often come down to incomplete data, a poor mobile experience, or technical errors in how 3DS is implemented. For merchant payment managers, PSPs, and risk teams, understanding these issues is critical.

This guide breaks down the key causes of low approval rates and offers five proven strategies to boost performance and maximise revenue from every transaction.

How 3DS Approval Rates Impact Your Revenue

Merchant revenue decreases when 3DS approval rates are low. Customers abandon the checkout process due to unnecessary friction, resulting in lost conversions. A percentage-point drop can result in millions in lost revenue. European merchants see a 2–3.5% downturn in conversion rate when 3DS authentication is poorly applied; U.S. merchants may experience losses up to 15%. Effective use of 3DS authentication reduces fraud liability, improves user experience, and supports higher average order value (AOV).

Common Causes of Low 3DS Approval Rates

Low 3DS approval rates usually point to problems in data quality, mobile optimisation, or inconsistent implementation. Identifying these gaps is the first step toward fixing them and improving conversion.

Insufficient Data Provision

Issuers use transaction data to make risk-based decisions. Merchants relying on the original 15 data points from earlier 3DS versions fail to provide critical information. Missing fields like billing/shipping address, postal-code match indicator, device fingerprinting, browser characteristics, and customer account attributes cause issuers to default to conservative models, leading to unnecessary challenges and declines.

Poor Mobile Experience

Over half of transactions occur via mobile, yet merchants continue to use browser-based 3DS authentication. This leads to issues with load times, improper iframe sizing, and redirects from native apps—causing checkout abandonment. Using native mobile SDKs for in-app authentication with biometric authentication and push-based authentication significantly improves approval rates.

Inconsistent Authentication Strategy

Inconsistent 3DS authentication usage disrupts issuer modelling. If transaction volume data is missing or the 3DS Requestor Challenge Indicator does not clearly indicate frictionless authentication versus challenge authentication, issuers lack the input needed to optimise risk decisions, resulting in lower approval rates.

Technical Implementation Issues

Low approval rates can stem from poor technical setups such as misconfigured parameters, missing required authentication method flags, excessive latency, or compatibility problems. Average authentication latency exceeding 37 seconds and poor use of 3DS Method URL contribute to customer drop-off and declines.

5 Tips To Optimise Your 3DS Approval Rates

Improving 3DS approval rates means making smart, targeted changes. These five tips show you where to start and what to fix first.

Optimisation Tip #1: Maximise Data Enrichment

Use the full range of 150+ data fields supported by 3DS 2.0. Include accurate billing/shipping address details with postal-code match indicator, invoke the 3DS Method URL early for device fingerprinting and browser characteristics, and share customer account attributes like account age, transaction history, and authentication method flags. Accurately use the 3DS Requestor Challenge Indicator to signal frictionless authentication or challenge authentication as needed.

Optimisation Tip #2: Implement Strategic Authentication Flows

Select frictionless authentication or challenge authentication based on risk. Use “02” (challenge not requested) for low-risk, returning users, and “03” (challenge requested) for high-value or new users. Apply SCA exemptions when eligible, using transaction risk analysis and whitelisting for qualifying low-risk transactions.

Optimization Tip #3: Optimize Mobile Authentication Experience

Use native mobile SDKs for in-app authentication that supports biometric authentication and push-based authentication. Ensure iframe sizing is optimised for responsive design and supports fallback options. Target sub-30-second authentication windows to retain users throughout the mobile journey.

Optimisation Tip #4: Monitor and Analyse Performance Data

Track 3DS approval rates by BIN ranges, transaction sizes, geographies, and customer segments. Identify underperforming segments and test updates with A/B testing. Use real-time dashboards to analyse performance of data elements, challenge indicators, and SCA exemptions.

Optimisation Tip #5: Implement Advanced Authentication Strategies

Recover soft-declined transactions through step-up authentication with options like SMS codes, push-based authentication, and biometric authentication. Use fraud engine risk scores to adjust challenge indicators, apply intelligent transaction routing, and implement machine-learning-driven feedback loops to adapt to issuer behaviour and emerging fraud pattern recognition.

Summary

To improve 3DS authentication success and protect revenue, merchants must go beyond basic implementation. Approval rates suffer when critical data fields are missing, mobile experiences are clunky, or authentication strategies are misaligned. By enriching data inputs, tailoring authentication flows by risk level, using native mobile SDKs, closely monitoring performance metrics, and applying advanced recovery strategies, payment teams can reduce friction, raise approval rates, and ultimately drive more completed transactions.