Issuer Declines KPI

Issuer Declines

Issuer declines happen during the payment authorization process when the issuing bank—the financial institution that provided the customer’s credit or debit card—refuses to approve a transaction. These declines can be temporary or permanent, and they’re one of the most common reasons for failed payments.

There are many potential causes for issuer declines. Common reasons include insufficient funds, expired or inactive cards, incorrect card details, spending limits, and suspected fraudulent activity. In other cases, banks may decline international transactions, block specific merchant categories, or have technical outages that prevent authorization.

Importantly, the merchant often receives only a generic decline code (like “05: Do not honor”), which makes it difficult to understand the exact reason. This lack of transparency can create friction in the customer experience, lead to lost revenue, and increase the likelihood of customer churn.

To reduce issuer declines, merchants can work with their payment processors to enable smart routing, tokenization, retry logic, and other tools that improve authorization success rates. Clear communication with customers and prompting them to use alternative payment methods can also help mitigate these failed transactions.