Authorization Requests KPI

Authorization Requests

The Authorization Request KPI tracks the number or frequency of requests submitted to an issuing bank to obtain approval for a transaction, a critical step in the payment processing chain. This KPI reflects the initial stage where the issuer verifies the cardholder’s account status, available funds, and transaction legitimacy through checks for fraud, compliance, or risk factors. Each request is evaluated based on the issuer’s proprietary criteria, which may vary, especially for high-risk scenarios like cross-border payments or transactions involving high-risk merchants, where scrutiny is intensified due to potential fraud or regulatory concerns.

This KPI is vital for assessing the efficiency and success of the payment process. For merchants, high authorization request volumes with low approval rates may indicate issues like insufficient funds, fraud flags, or overly stringent issuer policies, impacting revenue and customer satisfaction. For issuers, it highlights their role in balancing fraud prevention with seamless transaction approvals. For customers, failed authorization requests can lead to transaction abandonment and dissatisfaction. Monitoring this KPI helps identify bottlenecks, optimize approval rates, and improve the overall payment experience, while also providing insights into fraud trends, issuer performance, and customer behavior across different transaction types.