Prevent payment failures from jeopardising your business
1. Understand Why Payments Fail
Credit card payment failures occur when transactions get declined after customers input their payment details and attempt to complete their purchase. Understanding the root causes helps you address these declines strategically and recover more revenue.
False declines represent your biggest opportunity for improvement. These legitimate transactions get incorrectly rejected by fraud detection systems or issuing banks. International credit card transactions also face significantly higher decline rates.
When you process cards issued in different countries from where your business operates, issuing banks often view these as higher risk. This lack of trust and visibility leads to more conservative approval decisions, even for legitimate purchases.
The decline happens within seconds as your transaction moves through the Visa or Mastercard network to the issuing bank. The bank’s automated systems evaluate the transaction location versus the cardholder’s typical spending patterns and purchase amounts compared to normal spending habits.
Issuing bank risk tolerance varies significantly between institutions. Some banks maintain conservative fraud filters that decline transactions at the first sign of unusual activity. Others use more sophisticated models that consider additional context before declining.
Your merchant category code also influences approval rates, as certain business types face higher decline rates due to perceived risk levels.
Cross-border processing adds complexity without changing transaction speed. While the transaction still completes in seconds, the additional risk signals from international processing trigger more cautious responses from issuing banks.
2. Use Direct Card Acquiring for Visa and Mastercard to Reduce Payment Failures
If you’re experiencing frequent card processing or card payment failures, working directly with card acquirers for Visa and Mastercard may help improve your success rates. Instead of routing payments through intermediaries, you can work directly with a card acquirer to improve authorisation rates.
Think of it this way: when customers pay with their cards, the payment typically flows from your system to your acquirer, then to the card network and finally to the customer’s bank for approval, before returning to your system.
With direct acquiring, you have a direct relationship with the entity that can work with you to improve authorisation rates. When you have fewer parties handling each transaction, there are fewer places where things can go wrong.
You’ll also have better visibility into the status of your transactions.
3. Implement Smart Retry Logic to Reduce Payment Failures
When transactions fail, automatically retrying them at the right time and in the right way can help recover many that would otherwise be lost. Smart retry logic determines when, how and how often to retry failed attempts based on the reason they initially failed.
Not all processing failures are the same, so your retry strategy shouldn’t treat them the same way either. Some failures are permanent, such as when someone’s card has expired or been cancelled.
These hard declines won’t succeed no matter how many times you try, so it’s better to ask customers to update their information. Other failures are temporary. Perhaps customers don’t have sufficient funds at the moment or their bank’s system is experiencing a brief technical issue.
These soft declines might work if you try again later, especially if you time it well.
Smart systems learn from patterns across millions of attempts. They notice which retry strategies work best for different types of declines, what times of day have better success rates and how customer behaviour affects timing.
You’ll want to set reasonable limits. Retrying a hard decline seven times won’t help anyone. But a soft decline might be worth trying again a few times, especially if you space out the attempts thoughtfully.
Having backup options ready also helps. If someone’s primary card fails, you might try a different stored method they’ve used before. You could also route the attempt through a different card acquirer. Some acquirers have better success rates for particular types of commerce or customer locations.
4. Keep Payment Information Up to Date to Reduce Payment Failures
Expired or outdated card information causes many preventable transaction failures. When customers’ cards expire or get replaced, their stored payment details become useless, but there are several ways to stay ahead of this problem.
The good news is that you don’t have to rely entirely on customers remembering to update their information. Card networks and payment platforms offer tools that can handle much of this automatically.
Card updater services work with major card networks to automatically refresh expired or replaced card details without any customer effort.
When someone’s bank issues them a new card, these services can often update your records behind the scenes. This prevents interruptions to recurring billing or subscription services.
You can also take a proactive approach by reaching out to customers before problems occur. Sending friendly reminders before cards expire gives people a chance to update their information voluntarily.
This feels much better to customers than getting surprised by a failed transaction and it often leads to better payment success rates.
Making it easy for customers to manage their payment information helps, too. Simple account portals that enable customers to quickly update cards, change billing addresses or switch to different payment methods give them control over their experience.
The most effective approach combines several strategies. You might use automated card updates as your primary defense, but also send occasional reminders and provide easy self-service options.
Real-time notifications about expiring cards or failed transactions help catch issues quickly, while detailed reporting enables you to spot patterns and address systemic problems.
6. Strengthen Fraud Detection Without Overblocking to Reduce Payment Failures
Finding the right balance between catching fraud and approving legitimate transactions directly affects your success rates. Overly aggressive protection can lead to revenue loss from declined legitimate customers, while insufficient security exposes you to potential fraud losses.
Modern protection relies on machine learning models that adapt to evolving patterns and threats. These tools analyse transaction data to spot suspicious activity while minimising false positives that decline legitimate customers.
The key is implementing risk-based authentication that matches security measures to actual risk levels. Standard transactions with low risk profiles require only basic authentication, ensuring a smooth customer experience.
When risk signals appear, such as unusual purchase amounts, new devices or suspicious locations, additional security measures should be automatically activated. Using fraud protection with customisable rules allows you to tune your fraud protection to your unique business, customers and risk tolerance.
7. Communicate Clearly with Customers After a Failure
When credit card transactions get declined, your error messages become crucial opportunities for transaction recovery. Rather than displaying generic failure notifications, use decline messages to guide customers toward successful completion through alternative payment methods.
Include specific alternative payment suggestions directly in your decline messages. When a card gets declined, immediately present other options you accept rather than forcing customers to navigate back to payment selection. Customers often have multiple payment methods available but default to their primary card first.
Your decline message should mention bank redirects and open banking payments for customers who prefer direct bank transfers, digital wallets like Apple Pay or Google Pay, real-time payment networks available in your markets and buy-now-pay-later services if you offer them.
Instead of saying “Payment failed, please try again,” use helpful language like “This card couldn’t be processed. Try paying with Apple Pay, bank transfer or a different card to complete your purchase.”
Present alternatives immediately on the error screen without requiring additional navigation. When customers see you accept multiple payment options, they gain confidence that they can successfully complete their purchase.
8. Monitor Key Payment Metrics
Tracking the right data helps you understand what’s working and what isn’t in your payment processes. Consistent monitoring enables you to identify trends, detect issues early and make informed decisions about optimising your payment infrastructure.
Focus on tracking authorisation rates broken down by payment method, geographic region and card issuer. Monitor decline reasons and their frequencies to understand what’s causing failures.
Measure retry success rates and recovery rates to see how often failed transactions eventually complete. Track false positive rates for legitimate transactions incorrectly flagged as fraudulent and analyse cross-border performance compared to domestic transactions.
Different acquirers can dramatically improve your authorisation rates, especially if you’re experiencing persistent decline issues with international transactions. Your current processor might have limited connections or poor standing with certain card issuers.
Switching to an acquirer with stronger issuing bank relationships often resolves these problems through better routing and improved issuer trust.
Rapyd’s direct Visa and Mastercard acquiring delivers some of the highest authorisation rates globally across the UK, Europe, Singapore, Israel and Latin America. As a top-20 Visa acquirer and leading Mastercard acquirer, Rapyd’s direct relationships with card networks translate into better approval rates for your transactions.
Set meaningful benchmarks by comparing your performance against industry standards specific to your business type. Review these measurements weekly for operational insights, monthly for trend analysis and quarterly for strategic planning.
Use this data to drive continuous improvement by testing different payment flows and measuring their impact on success rates, while setting up automated alerts for sudden changes in key metrics.
9. Train Your Team to Handle Transaction Failures
Even with sound systems, some transaction failures will happen. Preparing your staff to handle these situations turns potential frustrations into opportunities for customer retention.
Train your personnel to recognise and understand various failure codes and their corresponding meanings. This knowledge helps them quickly diagnose problems and provide accurate information. Create a guide explaining failure codes and potential solutions.