The 3DS landscape is undergoing a major shift from a historic "blame game" between merchants and issuers toward real collaboration built on data sharing and trust.

In Arcot's April podcast episode, James Jenkins, Head of Customer Development and Matt Cooke, GM and VP of Arcot, discuss how merchants are now using 3DS, not just to shift fraud liability, but as a communication protocol with issuers. The rise of "data-only" transactions (RCI 06) is fueling this change, improving approval rates while reducing friction for legitimate customers, particularly in the US region where false declines are a big problem. False declines impact trust and loyalty for merchants and issuers alike. When merchants share rich risk signals, they help issuers make smarter, faster decisions.

Arcot's Smart Ruleset is also helping issuers optimize authentication strategies based on changing merchant behavior and transaction patterns without overhauling existing systems. Smart Ruleset is focused on improving approval rates while minimizing fraud exposure. Early adopters are seeing critical advantages in their metrics, including lower fraud, higher approval rates, and a stronger customer experience.

The industry is shifting from a fragmented approach toward data-driven collaboration. The payoff? Lower fraud, higher approval rates, fewer false declines, and smarter risk handling.