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The Data Sharing Imperative: Beating False Declines, Lowering Visa DCAP Interchange Fees, and Achieving Higher Authorization Rates

Blog
EMV 3DS
Payments
Data Sharing
Analytics
Card not present (CNP)
Visa
Fraud prevention innovation
Matt Cooke, Vice President and General Manager, Payment Security Division, Broadcom
Jul 29, 2026
Blog

If your business is seeing staggering 15-20% decline rates in direct-to-authorization transaction flows, you are not alone. For years, merchants have struggled with false declines and the resulting impact on revenue via lost sales. But a major shift is underway in payments. Instead of seeing payment authentication as a security hurdle, merchants are leveraging authentication and specifically EMV 3-D Secure (3DS) as an optimization tool and a way of boosting revenue through higher approval rates.

To achieve this, leading merchants are no longer treating every transaction with the same level of risk. Instead, they are risk scoring each transaction and routing the subset of trusted, high-value transactions to 3DS “data-only”, cardholder journeys.

Instead of actively challenging the cardholder, this approach shares rich merchant intelligence with issuers in the background of the transaction, in real-time. In fact, at Arcot, Broadcom Inc.’s Payment Security Division, these transactions cannot be challenged due to policies implemented to protect the customer experience. By sending additional metadata over the 3DS rails, merchants inform issuer risk models and ensure a frictionless journey for customers.

We validated this approach in 2025 during our pilot with Square. Performance improvements were significant. Across 6 million transactions, Authentication Success Rates (ASR) increased by 19% and Authorization Rates improved by as much as 646 basis points across major issuers. Chargebacks also improved and declined by an average of 6% as issuers were better placed to solve disputes themselves using the additional merchant data. You can learn more in the full case study about our work with Square.

Data sharing is part of the new use case for 3-D Secure and it applies both in regulated and non-regulated markets. For example, in the U.S., merchants are utilizing the Data Share Only (RCI 06) indicator to send low-risk transactions to issuers with a guaranteed frictionless outcome. Adoption is accelerating rapidly. An analysis of 2.85 billion transactions in Broadcom’s newly released Arcot 2026 Payments Report reveals an over 10% year-over-year increase in Data Share Only (RCI 06) volume growth in the U.S. market.

In the regulated European market, the picture is broadly similar with some technical nuances. Under the PSD2 Strong Customer Authentication (SCA) mandate, merchants are leveraging Acquirer TRA (RCI 05). This exemption informs issuers that the transaction has already passed merchant risk checks and is safe to approve. In this use case, liability shifts to the issuer but the concept of using the 3DS rails to share data in real time for better performance remains the same.

Data-sharing can also provide real commercial benefits to merchants via reduced interchange fees. Take Visa’s Digital Commerce Authentication Program (DCAP), for example. Visa is now offering merchants the opportunity to qualify for reduced interchange fees – provided they meet specific data quality criteria and utilize the 3DS RCI 06 Data Share Only feature.

These industry developments align with Arcot’s vision of a data-enriched payment ecosystem as the key to smarter, safer payments. As global network data confirms, the strategic application of merchant intelligence is fundamental to reducing fraud, lowering interchange costs, and maintaining a frictionless customer experience. As authentication standards continue to evolve, merchants who prioritize high-quality data-sharing will be best positioned to balance security requirements with optimized authorization outcomes.

 

About the author

Matt Cooke is Vice President and General Manager of the Payment Security Division at Broadcom. In this role, he is responsible for the development and delivery of financial technology (FinTech) solutions that prevent payment fraud for many of the world’s largest companies.

 

Arcot by Broadcom Logo

About Arcot by Broadcom

Broadcom provides semiconductors and infrastructure software for global organizations’ complex, mission-critical needs. We combine long-term R&D investment with superb execution to deliver the best technology, at scale. Arcot, the Payment Security Division of Broadcom, is a recognized global leader in 3-D Secure (3DS) digital payment solutions for major financial institutions, including card issuers and payment processors and merchants. Powered by intelligence from the Arcot Network, our solutions block e-commerce fraud, maximize authorization approvals, and ensure customers maintain seamless compliance with PSD2 and scheme regulations. By deploying advanced 3DS optimization strategies, Arcot helps businesses enhance the customer experience and unlock sustained revenue growth.

Follow us on LinkedIn. Ready to boost your authorization rates, reduce technical friction, and accelerate revenue growth? Contact Us or email our team at sales.arcot@broadcom.com.

 

 

Matt Cooke, Vice President and General Manager of the Payment Security Division at Broadcom

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