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Understanding the Difference Between 2D and 3D Payment Gateways

Updated: Nov 6, 2022



Payment gateways are the access points for eCommerce websites to accept payments from their customers. There are two main types of payment gateways: 2D and 3D. They have different features, and one will suit your eCommerce website better than another depending on your needs. Using the right payment gateway not only saves you time but also helps reduce costs and streamline processes. This article covers everything you need to know about 2D vs 3D payment gateways and what factors you need to consider when selecting one over the other.


What is a 2D payment gateway?


A 2D payment gateway is one that transfers funds from the customer’s account to your account based on an identifier (such as a credit card number). It doesn’t go to your customer's bank account. The most commonly used 2D payment gateways are the following: - American Express - Authorize.net - CyberSource - Diners Club - Discover - iATS - MasterCard - PayPal - Stripe - Visa A 2D gateway accepts the payment through the customer’s credit card or debit card and transfers the funds to you immediately. It doesn’t transfer funds to the customer’s account or send them directly to your bank account.


What is a 3D payment gateway?


A 3D payment gateway is one that transfers funds from the customer’s account to your account based on an identifier (such as a bank account number). A 3D payment gateway functions similarly to a 2D payment gateway, but with an additional verification step that increases security. Before the amount is deducted from the cardholder's bank account, an OTP (one-time password) is generated.

An OTP is a password made up of random numbers that are generated and sent to the cardholder's mobile phone via SMS, soft tokens, or emails whenever a new transaction is required. The OTP is usually valid for a short period of time, ranging from 10 to 25 seconds depending on the provider and the type of service. This extra layer of security distinguishes between 2D and 3D payment gateways. It doesn’t go to your customer's credit or debit cards. A 3D gateway accepts the payment through the customer’s bank account or credit card and transfers the funds to you after the funds are transferred from their account. It doesn’t transfer funds to the customer’s account or credit card.


How to select a 2D or 3D Payment Gateway?


The first thing you need to do when selecting a 2D or 3D payment gateway is to choose your business model. This will help you narrow down your options and decide which payment gateway best suits your business needs. The 2D payment gateway is best for businesses that sell products in person, online or on the phone. They sell mostly physical goods, products or services. These businesses are called “merchant acquirers.” Most of them process transactions through a credit card network like Visa or American Express. This makes a 2D payment gateway a suitable option for these types of businesses. The 3D payment gateway is best for businesses that sell products and services that are mostly digital. These businesses are called “merchant account providers.” They usually process transactions through a bank or payment service provider. This makes a 3D payment gateway a suitable option for these types of businesses.


Conclusion


This article has covered the difference between 2D and 3D payment gateways and how to select the right one for your business. A 2D payment gateway is best for businesses that sell products in person, online or on the phone. A 3D payment gateway is best for businesses that sell products and services that are mostly digital. The best way to decide which payment gateway is best for you is to evaluate the volume of card payments, customer preference, fraud and risk, service level agreement, and security.

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