One of the top complaints from a customer is why their payment was declined. Transaction can be declined both by the credit card issuing bank or by merchant's block rules system. This unpleasant issue can also affect merchant's approve ratio, so it is important to control customers failed purchases and understand why was it occured.
Most declines that come from issuing bank send generic code reasons, so for more information it is better to contact customer's bank to avoid similar problems in future.
There are soft and hard declines. The soft ones can be caused by a temporary issue and may be retried, while the hard ones are the result of an error which cannot be resolved immediately.
The most common reasons for a transaction decline are:
- Insufficient funds.
Customer has not enough money on a credit card to make a purchase;
- Incorrect card details.
e.g incorrect or incomplete CVV/CVV2 number or typo in credit card number;
- Card has expired.
A credit card expiration date is not valid anymore;
- Billing and card statement address mismatch.
When customer's billing address doesn't match their physical location, e.g customer may be on business trip to another country;
- Limit exceeded.
When customer attempts to make a transaction that exceeds the limit stated on their account;
- Anti-fraud block rules.
Transactions get declined when anti-fraud system detects unusual pattern for a customer, e.g too many attempts to make a purchase in a short period of time or risky billing location.
The more data merchant collects from his customers the more chances to avoid troubles with payment flow and operate within an acceptable decline ratio.