When the processing of a card transaction fails you may receive a generic response that simply states it was, ‘declined by authorisation system’.
Obviously, a response as vague as this is very mysterious and rather unhelpful. However, this is actually a fairly common response for payments which have been declined. Standard banking procedures for card issuing banks can be notoriously vague when defining a declined card transaction. For risk and safety reasons the card issuing banks do restrict charges on behalf or in favour of their cardholders.
Unfortunately, there is no merchant, payment service provider, gateway or acquiring bank that actually knows exactly what ‘declined by authorisation system’ means.
Many payment service providers have determined some possibilities of what this could mean, but again they are all guesses since no one has any concrete evidence. Some of these potential reasons include:
- Insufficient funds / limit reached – the customer does not have enough available credit on their card to support the transaction
- Risk system of issuing bank – the transaction failed the card issuing banks’ risk checks
- Risk system of acquiring bank – the transaction failed the acquiring banks’ risk checks
- Other technical reasons – such as the card not being enabled for online transactions or international transactions, or the customer has reached their spend limit on their card
CAN MERCHANTS DO ANYTHING TO RESOLVE DECLINED CARD PAYMENTS?
NOTIFY YOUR CUSTOMER AND ATTEMPT TO RE-CHARGE
In some instances, your customer’s payment simply won’t go through, no matter how many times you try. However, there’s a good chance that the customer has the funds and all that happened was an unexpected technical issue or case of incorrect card details.
It’s worth contacting your customer to let them know what has happened and encourage them to give their card details a double check. We’d recommend doing this personally, as a generic automated email may prove ineffective.
A second attempt could be all it takes for your customer to complete their order and for you to get paid.
OFFER A WIDER RANGE OF PAYMENT METHODS
Another easy way to resolve the issue of a failed card payment is to offer your customer an alternative payment method, such as a:
- Different debit/credit card
- Bank transfer
- Digital wallet
WORK WITH YOUR CUSTOMER TO RULE OUT ‘OTHER TECHNICAL REASONS’
To rule out this out as a possibility it’s worth checking the following with your customer:
- Is the card enabled for online or international use? (usually this feature can be enabled via their banking app)
- Is tokenisation of card storage allowed for the card type?
- What is the spend limit on their card?
ENCOURAGE YOUR CUSTOMER TO CONTACT THEIR BANK
Last, but not least our final suggestion is to have your customer call their bank and ask them specifically why their transaction was declined and to see if they are able to allow the purchase to now go through.