When merchants talk about reducing chargebacks, two terms come up again and again: 3DS (3D Secure) and RDR (Rapid Dispute Resolution). We hear the same questions at Durango Merchant Services all the time:
“Which one should I use? Is one better? Do I need both?”
The simple answer: they serve different purposes, and the smartest merchants use both.
If it helps, picture it like this:
- 3DS is the door guy who keeps fraudsters from entering in the first place.
- RDR is the quick-action customer support rep who resolves issues before they turn into actual chargebacks.
Here’s the straightforward breakdown:
What Is 3D Secure (3DS)?
3DS is an authentication system (Visa Secure, Mastercard Identity Check, and similar programs) that adds an extra layer of verification during checkout.
In 3DS 2.x—the version you should be using—most transactions don’t require any extra steps from the customer. The system reviews more than 100 data points behind the scenes and only prompts the buyer when something looks off.
Main Benefits of 3DS 2.0 for Merchants:
- Liability shift: If the transaction is fully authenticated with 3DS, fraud-related chargebacks (reason codes like 10.4 “Cardholder Does Not Recognize”) shift to the issuer – you don’t eat the loss.
- Proven to reduce true fraud and a good chunk of friendly fraud.
- Required for SCA compliance in many regions and strongly recommended everywhere else to stay under Visa’s fraud monitoring thresholds (especially with VAMP in 2025–2026).
Downsides of 3DS 2.0:
It won’t stop non-fraud disputes (item not received, not as described, cancellation requests, etc.), which make up the majority of chargebacks for most merchants.
What Is Rapid Dispute Resolution (RDR)?
RDR is Visa’s automated pre-dispute resolution program (powered by Verifi, part of Visa since 2019). When a Visa cardholder contacts their bank about a transaction (before or instead of a real chargeback), the issuer can send a pre-dispute alert through Visa Resolve Online (VROL). If your rules say “auto-refund anything under $25” or “auto-refund all digital goods disputes” or whatever criteria you set, the system instantly issues the refund and the case is closed – no chargeback ever hits your account. Main benefits for merchants:
Main benefits for merchants:
- Stops chargebacks before they count against your ratio.
- No representment hassle, no $25–$100 chargeback fees, no lost merchandise value in many cases.
- Huge impact on merchants with high-volume, low-dollar disputes (subscriptions, digital products, nutraceuticals, etc.).
Downsides of RDR for merchants:
Only works for Visa cards (about 50–60% of transactions for most U.S. merchants), and you have to give up some revenue on auto-refunded transactions. But the math almost always works out heavily in your favor because you avoid the chargeback fee + lost goods + ratio damage.
Downsides of RDR for merchants:
Only works for Visa cards (about 50–60% of transactions for most U.S. merchants), and you have to give up some revenue on auto-refunded transactions. But the math almost always works out heavily in your favor because you avoid the chargeback fee + lost goods + ratio damage.
Comparison 3D Secure vs RDR
Only works for Visa cards (about 50–60% of transactions for most U.S. merchants), and you have to give up some revenue on auto-refunded transactions. But the math almost always works out heavily in your favor because you avoid the chargeback fee + lost goods + ratio damage.
| Feature | 3D Secure (3DS) | Rapid Dispute Resolution (RDR) |
|---|---|---|
| When it works | During checkout | After the sale, when customer complains to their bank |
| Primary goal | Prevent unauthorized use / fraud | Stop customer disputes from becoming chargebacks |
| Covers | Mostly fraud-related disputes | Mostly non-fraud disputes (buyer’s remorse, non-receipt, etc.) |
| Card brands | All major brands | Visa only |
| Liability shift? | Yes – for authenticated transactions | No – you’re issuing a refund |
| Impact on chargeback ratio | Indirect (fewer fraud chargebacks) | Direct – prevents the chargeback entirely |
| Typical reduction | 30–70% drop in fraud chargebacks | 20–60% drop in total chargebacks (depends on rules) |
Do You Need Both?
Yes — if you want the lowest possible chargeback ratio and the best odds of staying out of Visa’s new VAMP program (the combined fraud + dispute monitoring system rolling out tighter thresholds in 2025–2026).
3DS does a great job blocking fraud and shifting liability. But it doesn’t help much with the two biggest chargeback categories most merchants face:
“Item Not Received”
“Credit Not Processed / Cancellation Request”
RDR handles those far better.
Merchants who use both tools often see:
60–85% overall chargeback reduction
40–60% additional fraud reduction on top of that
Real-World Example From Our Clients
One subscription-box merchant was running a 2.8% chargeback rate, mostly from renewal confusion and shipping complaints.
After enabling 3DS 2.2 and adding intelligent RDR rules through Verifi, their chargeback rate dropped to 0.68% within three months and has stayed there for more than a year.
They’re now below every monitoring threshold and even increased revenue because fewer customers were frustrated or disputing transactions.
Bottom Line About 3DS 2.x vs RDR
- If you only want one tool → start with 3DS 2.x (it gives you liability protection and is basically table stakes now).
- If you want to be truly aggressive about chargebacks and stay way under VAMP thresholds → you want both.
Contact Durango Merchant Services to Learn More!
At Durango Merchant Services we set up both 3DS and RDR (plus Ethoca alerts, Fraud Deflect, and our own proprietary scrubbing) for almost all of our high-risk and high-volume clients. The combination is brutally effective. Need help figuring out which combination makes sense for your specific business model? Just reach out – we’ll run the numbers on your last 3–6 months of processing and show you exactly what kind of reduction you can expect.
