Decoding and understanding payment declines.

By Marco Conte

Experiencing payment declines can be frustrating for users. In an ideal world, all transactions are expected to succeed. But in reality, they often fail. On average, approximately 10 to 20% of online transactions are declined. Some businesses might even experience comparatively higher decline rates, potentially driving users away.

Companies invest substantial resources in acquiring customers through marketing campaigns, SEO, and other strategies. However, these efforts can become futile if there isn’t a deeper grasp of conversion rates and the reasons behind declines. Understanding decline codes is crucial for businesses to manage their payment processes effectively and ensure a frictionless customer experience. Read more to understand Congrify’s strategic solution to dealing with declines. 

Breaking down declines

While transactions can be deceivingly simple, there are a multitude of reasons behind failed transactions. Here are ten common reasons why payments can fail:

1. Insufficient Funds: The cardholder’s account does not have enough money to cover the transaction amount.
2. Incorrect Card Information: Errors in the entered card number, expiration date, CVV code, or billing address can lead to transaction failures.
3. Expired Card: Payments will fail if the card being used has expired.
4. Suspected Fraud: Transactions that trigger fraud detection mechanisms may be declined to protect the cardholder from unauthorized charges.
5. Card Limits: Daily or monthly transaction limits set by the card issuer can cause a payment to be declined if the limit has been reached.
6. Technical Issues: Problems with the payment gateway, network issues, or server downtime can prevent transactions from being processed.
7. Merchant Account Issues: Problems with the merchant’s account, such as an invalid or improperly configured merchant account, can lead to payment failures.
8. International Transaction Restrictions: Transactions attempted from a different country than where the card was issued may be blocked due to geographical restrictions.
9. Issuer-Specific Declines: The card-issuing bank may decline a transaction for reasons specific to their policies or the account status of the cardholder.
10. Currency Issues: If the currency of the transaction is not supported by the card or the payment processor, the transaction may fail.

In identifying these failures, PSPs and banks have developed organizational systems by assigning each decline with a reason code. Decline reason codes aid in further understanding of reasons behind transaction failures. However, each PSP assigns their own unique set of codes, making it complicated for merchants to consolidate and analyze failures efficiently.

How to handle decline codes

To fully understand reason codes across different PSPs merchants must ensure that they are comparable in a consistent and standardized manner. The most optimal strategy is to analyze and create an internal dictionary of all possible combinations of the different reason codes, ultimately mapping them to an internal standard language.

This task can be overwhelming, requiring immense resources to analyze the multitude of reason codes; alongside constant updates each time a new PSP is integrated or payment method is enabled.

Let’s delve into a few examples from 3 major PSPs (Stripe, Adyen, and WorldPay) on how even small differences in terminology and word choices can affect and complicate decline reason code analysis:

When a transaction is declined due to insufficient funds, the following codes will be displayed compared to Congrify’s standardized solution:

Another common reason behind declines is an invalid card number:

Finally, stolen cards can also be a reason behind a transaction decline:

How Congrify can help

In today’s complex payment landscape, managing fragmented data across different reports and PSPs can be a hassle. Congrify unifies all this information, allowing users to analyze decline reason codes on multiple dimensions without wasting resources on data transformation or linking. Our platform ensures easy comparisons by standardizing decline reason codes across different PSPs, making understanding payment failures efficient. 

With Congrify, straightforward visualizations showing payment failure reasons and their impact are guaranteed. Our solution keeps users informed by detecting potentially harmful anomalies and spikes in declines. Eliminate the wait for data analysis, customer complaints, and escalations as our platform alerts and redirects users to decline increases and root causes of payment issues. 

Choose Congrify to streamline your payment data analysis, enhance your troubleshooting process, and stay ahead of potential issues with proactive alerts by scheduling a demo today!