There are two reasons why charges get declined.
1. The customer’s bank (issuing bank) declines the charge for one of the following reasons:
- The cardholder does not have enough funds
- Card information is wrong
- There are other signs that the charge should not be approved
2. The charge gets flagged as an illegitimate or fraudulent charge by the issuing bank or the acquiring bank.
We can help you figure out why the charge didn’t go through and help you understand the potential risk factor.
When a charge is issued, your customer's bank will look at:
- The cardholders spending habits
- Card information,
- Account balance
- And other signals to determine whether it will accept the charge
We will show you the information we receive when the charge is declined. But, the reasons given by the bank are often generic. If the customer’s bank declines the charge, the customer will have to speak with their bank and ensure the approval of future charges.
The acquirer hosts your TPV virtual or merchant ID. During an online transaction, MONEI’s payment gateway, the issuing bank, and your acquiring bank communicate. It happens in a matter of seconds. And there are security checks for fraud to determine whether the payment is approved or declined.
The acquirer sends the payment message back to us, and then the final approved or declined message gets sent to you.
Learn more about how payments are processed with a payment gateway here.
How to decrease the likelihood of declined charges
Validation checks help to make sure the customer has entered the correct credit card number, expiration date, and CVC code. As well as the name and billing address associated with that card.
Collecting CVC codes is very effective in decreasing decline rates. We include CVC in all payment screen integration options.
3D Secure Challenge
We use a dynamic 3D Secure challenge to check transactions for risk factors such as location, contact information, and customer behavior. Suspicious activity is sent through a 3D secure challenge to minimize fraud. High-risk transactions are not blocked until we’re 100% sure it’s necessary.
Low-risk transactions don’t get challenged, so the cardholder can pay without interruption.
Dynamic 3D Secure is also referred to as a “Frictionless Challenge." It requires two-factor authentication only when necessary. This way the chances of a lost sale decreases, and your conversion rate increases.
You can demo MONEI’s dynamic 3DS challenge here.
And learn more about 3D Secure and its advantages for e-commerce here.
MONEI’s smart routing engine also decreases the likelihood of lost sales on legitimate charges. During the payment process, transactions get sent to multiple acquirers and processors. This way, if the charge is falsely declined by one, it gets sent to another acquirer to try again before your customer gets a declined payment message.