Did you know that U.S. ecommerce merchants lost around $8.6 billion to false declines in 2016? Mobile payment declines can have a significant impact on your business, resulting in lost sales and frustrated customers. Understanding the reasons behind payment declines is crucial for resolving these errors and salvaging the sale. In this article, we will explore common mobile payment errors, provide a comprehensive guide to troubleshooting mobile payment issues, and help you decipher error code meanings to effectively resolve mobile payment errors.
Key Takeaways:
- Mobile payment declines can lead to significant revenue loss and customer dissatisfaction.
- Understanding the card authorization process is essential for resolving payment errors.
- Decline codes provide valuable information about the specific reason for the transaction failure.
- Soft declines can usually be resolved by retrying the transaction, while hard declines require additional action.
- Common reasons for card declines include insufficient funds, incorrect data entry, and suspected fraudulent activity.
What is card authorization?
Card authorization is a crucial step in the credit card transaction process. It happens behind the scenes when a customer makes a purchase using their card. Whether it’s an in-person transaction where the customer swipes or inserts their card, or an online purchase where they enter their payment information, the authorization process kicks into action.
Here’s a brief overview of how card authorization works:
- The customer initiates a transaction using their credit card.
- The transaction details are transmitted to the business’s acquirer, a financial institution that processes credit card transactions.
- The acquirer routes the transaction to the appropriate card network and the card issuer.
- The card issuer checks the customer’s account to determine if there are sufficient funds or available credit to complete the transaction.
- Based on the account balance or credit limit, the card issuer sends an authorization response to the acquirer.
This entire process happens in a matter of seconds, ensuring a smooth transaction for both the customer and the business.
| Step | Description |
|---|---|
| 1 | Customer initiates a transaction using their credit card. |
| 2 | Transaction details are transmitted to the business’s acquirer. |
| 3 | Acquirer routes the transaction to the card network and the card issuer. |
| 4 | Card issuer checks for sufficient funds or available credit. |
| 5 | Card issuer sends an authorization response to the acquirer. |
Understanding the card authorization process is essential for businesses in order to ensure successful credit card transactions. By having this knowledge, businesses can address any issues that may arise during the authorization process, such as insufficient funds or declined transactions, and provide a seamless payment experience for their customers.
What is a decline code?
A decline code is a two-digit alphanumeric error code that indicates why a card transaction has been declined. The code can originate from the issuing bank, payment processor, or credit networks. It helps businesses understand the specific reason for the transaction failure. Payment processors like Stripe may use their own unique decline codes to provide more specific information about the transaction failure.
When a card transaction is declined, it can be frustrating for both businesses and customers. Understanding the decline code is crucial in troubleshooting the issue and resolving payment failures effectively.
Decline codes serve as a standardized way to communicate the reasons behind a transaction failure. By analyzing the decline code, businesses can pinpoint the issue and take appropriate action to address it.
The decline code typically consists of two characters, combining both letters and numbers. It provides valuable information about the reason for the decline, such as insufficient funds, invalid account information, or suspected fraud.
The issuing bank, payment processor, or credit network generates the decline code based on the specific rules and policies they have in place. It helps businesses identify the exact cause of the decline and collaborate with the necessary parties to resolve the issue.
For example, if a decline code indicates “05: Do not honor,” it suggests that the issuing bank has declined the transaction for reasons specific to their policies. By understanding this code, businesses can reach out to the issuing bank to gain further insights or seek alternative payment options.
Payment processors like Stripe may also use their own unique decline codes in combination with the standard decline codes. These codes provide more detailed information, allowing businesses to narrow down the root cause of the decline and implement appropriate solutions.
Understanding decline codes is essential for businesses to troubleshoot and resolve payment failure issues effectively.
Types of card declines
When it comes to card declines, they can be grouped into two main types: soft declines and hard declines. Understanding these types of declines is crucial for businesses to effectively address payment issues and provide a seamless customer experience.
Soft Declines:
Soft declines are usually temporary and can often be resolved by retrying the transaction. These declines are typically caused by technical or financial difficulties that can occur during the payment process. Some common reasons for soft declines include network connectivity issues or insufficient funds in the customer’s account.
Hard Declines:
On the other hand, hard declines are caused by security issues that cannot be easily resolved by retrying the transaction. When a hard decline occurs, it means that the card issuer or bank has not authorized the transaction due to potential fraud, invalid account information, or a lost or stolen card.
Understanding the difference between soft declines and hard declines is crucial for businesses to determine the appropriate actions to take when addressing payment failures. By identifying the type of decline, businesses can quickly troubleshoot temporary issues or take additional security measures to ensure the safety of transactions.
Common reasons for card declines
Card payments can be declined for various reasons, causing inconvenience for both businesses and customers. Understanding these common reasons can help businesses address the issues promptly and provide alternative solutions. Here are some of the most frequent causes of card declines:
- Insufficient funds or credit: If a customer’s account has inadequate funds or available credit, the payment will be declined. This situation can arise due to low account balances or temporary holds on funds.
- Incorrect data entry during online transactions: Mistakes in entering payment information, such as incorrect card numbers, expiration dates, or CVV codes, can lead to payment declines. It is essential to double-check the entered data for accuracy.
- Suspected fraudulent activity: Transactions flagged as potentially fraudulent by the card issuer’s security measures may be declined. This precaution helps protect customers from unauthorized charges.
- Card not activated: If a customer has not activated their card, the payment will be declined. Card activation is necessary before using it for transactions.
- Expired card: When a card reaches its expiration date, it becomes invalid for payments. Customers need to update their card information with the issuer to continue making purchases.
- Incompatible terminal: Some card networks are not supported by certain point-of-sale or online payment terminals. In such cases, transactions using incompatible cards may be declined.
By understanding and addressing these common reasons for card declines, businesses can minimize payment issues and provide a seamless customer experience. Offering alternative payment methods like buy now, pay later options can also help overcome declines due to insufficient funds. If a decline occurs, businesses can communicate with the card issuer, verify and re-enter correct information, activate the card if necessary, or suggest alternative payment options to complete the transaction successfully.
To visualize the common reasons for card declines, refer to the table below:
| Reason | Description |
|---|---|
| Insufficient funds or credit | The customer’s account does not have enough funds or available credit to cover the payment. |
| Incorrect data entry during online transactions | Mistakes in entering payment information, such as incorrect card numbers, expiration dates, or CVV codes. |
| Suspected fraudulent activity | Transactions flagged as potentially fraudulent by the card issuer’s security measures. |
| Card not activated | The customer has not activated their card before attempting to use it for transactions. |
| Expired card | The card has reached its expiration date and is no longer valid for payments. |
| Incompatible terminal | The card network used by the customer’s card is not supported by the payment terminal. |
Understanding the common reasons for card declines and taking proactive measures can help businesses improve the success rate of transactions and provide a seamless payment experience for customers.
List of card decline codes
Here is a comprehensive list of card decline codes that may appear to indicate why a payment has been declined. Each code represents a different reason for the decline, providing businesses with valuable information to troubleshoot and resolve payment issues. Some common decline codes include:
01: Refer to issuer – This code suggests that the customer needs to contact their card issuer for further assistance regarding the transaction.
05: Do not honor – This code indicates that the card issuer has chosen not to authorize the transaction.
14: Invalid account number – This code signifies that the account number entered is invalid or incorrect.
51: Insufficient funds – This code suggests that the customer does not have enough funds in their account to complete the transaction.
86: Cannot verify PIN – This code indicates that the PIN provided for the transaction could not be verified.
These are just a few examples of the many card decline codes that businesses may encounter. By referring to this list, businesses can gain a better understanding of the reason behind a declined transaction and take appropriate action to resolve the issue.
| Code | Reason for Decline |
|---|---|
| 01 | Refer to issuer |
| 05 | Do not honor |
| 14 | Invalid account number |
| 51 | Insufficient funds |
| 86 | Cannot verify PIN |
Understanding card payment failures
Card payment failures can be frustrating for both buyers and businesses. When a payment fails, it not only results in buyer frustration but can also damage the reputation of an ecommerce site and discourage future purchases.
Payment failures can be categorized into two main reasons: security checks and technological errors. Security reasons involve checks and verifications put in place by various roleplayers to ensure the legitimacy of the transaction. These checks are essential to protect against fraudulent activities and unauthorized transactions, but they can sometimes lead to false positives and decline valid payments.
Technological errors, on the other hand, can occur due to system downtime or human errors in entering payment details. It’s not uncommon for users to make mistakes when entering their card information, such as mistyping their card number or expiration date. Additionally, system glitches or connectivity issues can also result in payment failures.
Understanding the specific reasons behind payment failures is crucial for businesses to take appropriate measures and reduce transaction failure rates. By identifying the root causes, businesses can implement strategies to minimize payment declines, improve customer experience, and maintain a strong business reputation.
“Payment failures can damage the reputation of an ecommerce site and discourage future purchases.”
| Reasons for Payment Failure | Description |
|---|---|
| Security Checks | Checks and verifications to ensure the legitimacy of the transaction can sometimes lead to false positives and decline valid payments. |
| Technological Errors | System downtime, network connectivity issues, and human errors in entering payment details can result in payment failures. |
Dealing with payment failures
When a payment fails, it can be a frustrating experience for both the business and the customer. However, there are several steps businesses can take to resolve payment failures and ensure a smooth transaction process.
If a payment fails, one of the first things you can do is advise the customer to contact their card issuer or bank. Often, the card issuer can provide valuable insights into the reason for the payment failure and guide the customer on how to rectify the issue.
Retry the payment:
If the payment failure was due to a soft decline, you may consider retrying the payment. Soft declines are usually temporary issues that can be overcome by attempting the transaction again. It could be caused by technical difficulties or insufficient funds. By retrying the payment, there is a chance that it will be successfully processed.
Offer alternate payment methods:
One effective strategy to minimize the chances of customers giving up on a purchase is to offer alternate payment methods. By providing options such as bank transfers or mobile payments, you broaden the opportunities for customers to complete their transactions successfully.
Narrow down fraud filters:
To reduce the risk of false declines, businesses can review and narrow down their fraud filters. While these filters are in place to protect against potential fraud, they can sometimes flag legitimate transactions as suspicious. By fine-tuning the fraud filters, you can strike a balance between security measures and minimizing legitimate transaction rejections.
Sending reminders:
Payment failures can also occur due to expired cards or the need for customers to update their card credentials. Sending reminder emails to customers regarding card expiration dates or the importance of updating their card details can help prevent these types of payment failures.
By following these steps, businesses can proactively address payment failures and maximize successful transactions. Take the necessary measures to assist customers in resolving payment issues promptly and explore alternative payment methods to cater to their needs. By continually optimizing fraud filters and sending reminders, you can ensure a seamless payment experience for both your business and your customers.
Failure Resolution Steps Summary:
- Advise customers to contact their card issuer or bank for assistance.
- Consider retrying the payment for soft declines.
- Offer alternate payment methods to minimize transaction abandonment.
- Review and narrow down fraud filters to reduce false declines.
- Send reminder emails regarding card expiration dates or the need to update card credentials.
By implementing these strategies, businesses can enhance customer satisfaction, minimize revenue losses from payment failures, and optimize their overall payment processes to drive success.
The impact of false declines
False declines can have a significant impact on businesses, leading to lost revenue and a negative customer experience. These declines occur when legitimate transactions are incorrectly rejected due to overly protective fraud prevention measures. While it is crucial for businesses to maintain security and prevent fraudulent activities, it is equally important to find the right balance with convenience to avoid unnecessary false declines.
In 2016, U.S. ecommerce merchants reportedly lost approximately $8.6 billion due to false declines. This staggering figure highlights the financial implications that businesses face when legitimate transactions are wrongfully rejected. Not only does it result in lost sales, but it also tarnishes the customer experience, potentially leading to a decrease in customer trust and loyalty.
To mitigate the impact of false declines, businesses should prioritize fraud prevention measures that accurately differentiate between fraudulent and legitimate transactions. This can be achieved by employing advanced fraud detection tools and systems that effectively analyze transaction patterns and customer behavior.
It is crucial for businesses to continuously evaluate and improve their fraud prevention strategies to minimize false declines. This ensures that legitimate transactions are not rejected, maximizing revenue potential while maintaining a positive customer experience. Striking the right balance between security measures and seamless payment processes is key to fostering trust with customers and optimizing business success.
| Impact of False Declines | Actions for Businesses |
|---|---|
| 1. Lost revenue | Implement advanced fraud detection tools |
| 2. Negative customer experience | Evaluate and improve fraud prevention strategies |
| 3. Decreased customer trust | Strike a balance between security measures and convenience |
| 4. Potential loss of loyal customers | Continuously optimize fraud prevention processes |
Ensuring successful payments
To ensure successful payments, tracking transaction response codes and identifying the reasons for payment failures is crucial. By doing so, you can improve your conversion rates by identifying and solving problems at the top of the sales funnel.
Choosing a reliable payment service provider is a critical step in achieving successful payments. Factors such as reliability, support quality, and technological capabilities should be considered when making this decision.
Offering multiple payment methods can significantly lower checkout drop rates and provide buyers with convenient options to complete their purchase. By diversifying your payment options, you cater to a wider audience and increase the likelihood of successful transactions.
“Improving your conversion rates starts with understanding payment failures and addressing them effectively.”
Tracking Transaction Response Codes
As an online business, it is essential to track transaction response codes to gain insights into payment failures. These codes provide valuable information about the specific reasons why a payment was unsuccessful.
By analyzing transaction response codes, you can identify patterns and common issues that lead to payment failures. This data allows you to take targeted actions to improve your payment process and reduce the chances of future failures.
Choosing a Reliable Payment Service Provider
When selecting a payment service provider, reliability should be a top priority. Opting for a reputable provider with a proven track record of secure and efficient payment processing can significantly increase the success rate of your transactions.
Consider the support quality offered by the payment service provider. Prompt and reliable customer support can help you address payment issues quickly and effectively, minimizing any potential disruptions in your payment process.
Technological capabilities are also crucial when choosing a payment service provider. Look for providers that offer advanced security features, seamless integrations, and compatibility with different payment methods to ensure a smooth and successful payment experience for your customers.
Offering Multiple Payment Methods
Incorporating multiple payment methods into your checkout process can significantly enhance your chances of successful payments. By offering a variety of options, such as credit cards, e-wallets, and alternative payment solutions, you cater to different customer preferences and reduce barriers to completion.
Additionally, providing multiple payment methods can help you capture international customers who may have preferred payment methods specific to their country. This expands your customer base and increases the global reach of your business.
| Benefits of Offering Multiple Payment Methods | Examples |
|---|---|
| Enhanced customer convenience | Credit cards, debit cards, PayPal, Apple Pay |
| Higher conversion rates | Bank transfers, mobile payments |
| Greater reach in international markets | Alipay, WeChat Pay, UnionPay |
Tips to reduce transaction fail rates
Reducing transaction fail rates is crucial for businesses to ensure smooth payment processes and maximize sales. By implementing the following tips, you can minimize transaction failures and provide a seamless payment experience for your customers.
- Priority on Security Measures: Prioritize the implementation of robust security measures to safeguard customer data and protect against fraud. Invest in encryption technology, SSL certificates, and secure payment gateways to ensure the safety of transactions.
- Technological Reliability: Choose a payment service provider with a proven track record of reliable systems. Evaluate their uptime statistics, system redundancy, and disaster recovery plans to ensure uninterrupted payment processing.
- Thorough Support Quality: Research and select a payment service provider that offers comprehensive customer support. A responsive support team can address any payment issues promptly, minimizing transaction failures and resolving customer concerns efficiently.
- Offer Multiple Payment Options: Provide your customers with a variety of payment options to choose from. By offering multiple payment methods such as credit cards, digital wallets, and alternative payment platforms, you increase the chances of successful transactions, catering to diverse customer preferences.
Implementing these tips will help you reduce transaction fail rates, enhance security measures, improve technological reliability, ensure high-quality support, and offer convenient payment options. By prioritizing these aspects, you can optimize your payment process and provide a seamless experience for your customers.
Conclusion
In conclusion, understanding mobile payment and transaction error codes is vital for businesses to resolve payment issues swiftly. By familiarizing themselves with the card authorization process, decline codes, types of card declines, and the comprehensive list of decline codes, businesses can effectively troubleshoot and resolve payment failures. By taking appropriate measures and offering alternative payment options, businesses can minimize transaction fail rates, improve customer experience, and ensure successful payments. Achieving a balance between security and convenience is key to preventing false declines and maximizing sales.
FAQ
What is card authorization?
Card authorization is the process that checks if a cardholder has enough funds or credit to complete a purchase. It occurs behind the scenes when a card transaction is processed. For in-person transactions, the customer swipes, taps, or inserts their card into a card reader, while for online purchases, they enter their payment information. The information is then sent to the business’s acquirer, which directs the transaction to the correct card network and the card issuer. The issuer examines the cardholder’s account to determine if there are sufficient funds or available credit to complete the transaction.
What is a decline code?
A decline code is a two-digit alphanumeric error code that indicates why a card transaction has been declined. The code can originate from the issuing bank, payment processor, or credit networks. It helps businesses understand the specific reason for the transaction failure. Payment processors like Stripe may use their own unique decline codes to provide more specific information about the transaction failure.
What are the types of card declines?
Card declines can be categorized into two types: soft declines and hard declines. Soft declines are usually temporary and can be overcome by retrying the transaction. They are often caused by technical or financial difficulties, such as network connectivity issues or insufficient funds in the customer’s account. On the other hand, hard declines are caused by security issues that cannot be resolved by retrying the transaction. They occur when the card issuer or bank does not authorize the transaction due to reasons like possible fraud, invalid account information, or a lost or stolen card.
What are some common reasons for card declines?
Card payments can be declined for various reasons. The most common reasons include insufficient funds or credit in the customer’s account, incorrect data entry during online transactions, suspected fraudulent activity triggering security measures, unactivated or expired cards, and cards incompatible with the terminal’s card network. Businesses can minimize declines due to insufficient funds by offering alternative payment options like buy now, pay later. Other issues can be resolved by communicating with the card issuer, re-entering correct information, activating the card, or using alternative payment methods.
Can you provide a list of card decline codes?
Certainly! Here is a comprehensive list of card decline codes that may appear to indicate why a payment has been declined. Each code represents a different reason for the decline, providing businesses with valuable information to troubleshoot and resolve payment issues. Some common decline codes include “01: Refer to issuer,” “05: Do not honor,” “14: Invalid account number,” “51: Insufficient funds,” and “86: Cannot verify PIN.” Businesses can refer to this list to better understand the reason behind a declined transaction and take appropriate action.
What should businesses understand about card payment failures?
Card payment failures can be frustrating for both buyers and businesses. When a payment fails, it not only results in buyer frustration but can also damage the reputation of an ecommerce site and discourage future purchases. Payment failures can be categorized into security reasons and technological errors. Security reasons include checks and verifications put in place by various roleplayers to ensure the legitimacy of the transaction. Technological errors can occur due to system downtime or human errors in entering payment details. Understanding the reasons behind payment failures is crucial for businesses to take appropriate measures and reduce transaction fail rates.
How can businesses deal with payment failures?
When a payment fails, there are several steps businesses can take to resolve the issue. It is advisable to ask the customer to contact their card issuer or bank to address the problem. In some cases, retrying the payment can be a solution, especially for soft declines. Offering alternate payment methods like bank transfers or mobile payments can also help minimize the chances of customers giving up on a purchase. Businesses can review and narrow down their fraud filters to reduce the risk of false declines. Sending reminder emails to customers regarding card expiration dates or the need to update card credentials can also prevent payment failures.
What is the impact of false declines?
False declines occur when legitimate transactions are incorrectly rejected due to overly protective fraud prevention measures. These false declines have a significant impact on businesses, leading to lost revenue and a negative customer experience. According to a report, U.S. ecommerce merchants lost around .6 billion to false declines in 2016. It is important for businesses to find the right balance between security checks and convenience to avoid unnecessary false declines and ensure a smooth payment process.
How can businesses ensure successful payments?
To ensure successful payments, businesses should track transaction response codes and identify the reasons for payment failures. This information can help them improve their conversion rates by identifying and solving problems at the top of the sales funnel. Choosing a reliable payment service provider is crucial, considering factors like reliability, support quality, and technological capabilities. Offering multiple payment methods can also lower checkout drop rates and provide buyers with convenient options to complete their purchase.
What are some tips to reduce transaction fail rates?
To reduce transaction fail rates, businesses should prioritize security measures while ensuring technological reliability. Choosing a payment service provider with a track record of secure and reliable systems is essential. Conduct thorough research on the support quality offered by the provider to address any payment issues effectively. Offering multiple payment options can also reduce transaction failures, providing buyers with a variety of choices to complete their purchases and increasing the chances of successful transactions.