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Not often do credit card declines occur. When they do, there is always a particular reason. Usually, transactions are declined by the processor, the issuing bank or the payment gateway. When a decline happens, you, as the merchant, receive an error message and decline code.
These error codes differ from gateway to gateway.
- An error code: This code identifies the error to the system.
- An error message: This message identifies the problem to you and your customer.
Category of credit card declines
Basically, there two types of credit card decline:
- Soft declines, which occur when the issuing bank approves payment, but the transaction fails somewhere else.
- Hard declines, which occur when the issuing bank fails to approve payments for processing.
Reasons why payments fail
Payments fail for a number of reasons which include:
- A credit card has reached the limit: A customer card can be declined if it has reached the credit limit. For example, the daily limit.
- Charge exceeds the maximum allowed: Some cards have limits when it comes to maximum charges allowed for a single charge. If the amount is higher, definitely the transaction will fail.
- Card not authorized to accept charges from online sources: Not all credit cards facilitate online transactions. Your customers can always talk with their credit card companies to authorize those charges.
- Card not authorized to allow international charges: Again, if a customer is using a card that does not allow international charges, then the transaction will fail.
- Expired card: No way an expired card will facilitate payment.
- Wrong credit card number: Entering the wrong credit card number will automatically generate errors.
- Wrong bill address: While not a major cause, in some cases, if the address you used for the transaction does not match those the credit company has, errors will be returned.
- Account has been closed: If the bank without noticed closed the credit card account, the transaction will not also go through.
- Account flagged: When an account is flagged as unsafe or unrecognized, the card will also be declined. Unusual spending habit is one thing that can result in a purchaser account been flagged.
Best solutions to declined credit card transactions
If the above errors pop up, consider doing the following:
- Contact the bank: Call your bank and find out why you keep getting the errors. Sometimes the bank could be blocking payments because of unsuspicious transactions. If that is the case, tell the bank you are dealing with a trustworthy merchant. As a merchant, encourage your purchasers to ring the bank for more details when credit cards fail.
- Try a new card: A purchaser adding a new card to payment settings is another brilliant idea if the current card keeps failing. Before adding, it is advisable to consult the bank.
- Keep customers informed: Some clients are not aware of the reasons behind payment failure. If you help them notice what the problem is, they can act quickly to stop further declined credit card transactions. One way to keep your client informed is by requesting them to update their payment information. Remind them often.
- Leverage a card updater: Go a step further and have a system in place that will help your customers update their payment information. A card updater gives your clients one less thing to worry about. You may want to also dun emails when your customers fail to update their details, and payment fails.
- Offer to give collateral: In some cases, customers go through a rough experience when businesses are reluctant to allow them to leave without paying their bills. In such a case, offer to give collateral until you return.
- Call someone for help: Calling a friend or family member when your credit card is declined is a brilliant idea that will stop a simple scenario from escalating.