It has officially been over one month since the Japan 3DS Mandate took effect on April 1, 2025. Under this regulation, 3DS is required for credit card transactions unless merchants have sufficiently robust fraud prevention and account protection measures in place.
We took a look at authorization rates across Japanese issuers in order to understand how they are adapting to the regulation and see the impact that the mandated use of 3DS is having on completion rates.
While it’s still too early to assess the legislation’s full impact, Forter is beginning to observe initial trends that may help merchants understand the mandate’s potential impact on their revenue, and decide which scenario they should apply for with their acquirer/PSP. Read on to see early results, key takeaways, and how Forter helps Japanese merchants avoid 3DS friction on up to 98% of their transactions.
Key Takeaways After One Month
One month into enforcement, we’re seeing a 15-to-25% lower completion rate for transactions using 3DS compared to those without it. Across all banks, the 3DS completion rate, which is the rate of transactions that complete 3DS and are successfully authorized, stands at just 75%.
On the other hand, the completion rate for non-3DS transactions is 94% — a 21% drop-off that is primarily due to 3DS-related friction. This gap also varies significantly by issuer, indicating that a one-size-fits-all approach may not be optimal.
Recommendations for Japan 3DS Compliance
Based on these initial findings, merchants should consider applying for Scenario 1 to minimize 3DS-related friction on low-risk transactions, including their guest checkout and non-stored cards. Given the low 3DS completion rates, limiting 3DS to only higher-risk transactions can significantly improve conversion. In fact, Forter merchants, on average, are only applying 3DS on 2% of their traffic, drastically limiting the impact of the 3DS friction.
How Forter Helps with Japan 3DS Mandate
Forter is currently helping merchants with traffic in Japan comply with the legislation while minimizing 3DS friction. Forter meets the JCA fraud and account protection checklist, allowing Forter merchants to get approval for Scenario 1 and avoid having to use 3DS on 100% of transactions.
Forter helps merchants avoid 3DS for low-risk transactions, block high-risk transactions pre-auth, and apply 3DS on borderline-risk transactions.
Without 3DS, many borderline risk transactions would be declined outright due to sensible caution. However, by using 3DS on these borderline transactions, merchants can gain more information on the customer and save the sale without taking on additional chargeback risk. By directing borderline-risk transactions to 3DS, Forter can reduce false declines leading to further authorization uplift of up to 60 basis points.
Overall, by working with Forter, merchants are able to avoid friction on up to 98% of transactions.
