Failed transactions: reasons and escape routes

Failed transactions: reasons and escape routes

“Transaction failed” — 2 words, 17 letters, and so much pain. Unfortunately, online transactions fail sometimes, and it’s no good for both payers and payees. It may result in low conversion rates, spoilt customers’ shopping experience, and profit decrease. Keep calm, we’ve figured out the main causes of conversion rate problems due to failed transactions, and ways to minimise such incidents.

Top reasons for online transaction failure

The conversion rate is the number of successful payments out of the total number of transactions. According to global statistics, only 75-90% of payments are processed successfully. A failed transaction or payment means that a person has tried to pay online or somebody has tried to charge a customer’s card (in case of automatic subscriptions or recurring payments) and the payment was not successful.

Some reasons are out of your control, like insufficient funds or expired cards. They happen on the customers’ side and any conversion optimisation steps are hardly possible in such cases.

There are decline reasons that are within your control. We’ve highlighted the main below.

  • 3D-S authorisation error

3D-Secure authorisation errors are the most common reason for failure and make up about 45% of all failures. It happens when a user did not enter the security code or entered the incorrect data, or didn’t receive the code, and the 3D-S authorisation page did not open.

  • Operation decline by the issuing/acquiring bank

This error accounts for about 29-33% of all declined transactions. Most often this happens due to the lack of funds on a client’s account, so the only solution is to refill the funds on a bank account.

  • Suspicious payer’s activity and further blockage by anti-fraud systems

Up to 25% of declines occur for this reason. In some cases, this is due to fraudulent activities on the part of the buyer.

  • Errors made by payers

The rarest reason, only 3-4% of failures. Not everyone knows about the CVC2 code required for 3D-S authentication. And it’s not a hopeless task you can’t influence. Providing your customers with an intuitive checkout, you’ll eliminate this type of failure.

  • Payment gateway issues

At times, the payment gateway that you are using may decline your transaction. This often happens because certain merchants may have an upper limit on transactions. If the transaction exceeds that amount, it gets declined. In such cases, the consumer has to make multiple transactions until the desired amount is reached. Another reason is a payment gateway fault, or simply its downtime.

  • Security issues

A security threat from the side of the issuing bank can lead to a decline. For example, a card is marked only for domestic use and is being used for an international website.

There can also be a range of other issues that may occur, for instance, poor internet connection, the two-factor authentication not occurring correctly, or the connection timing out due to a slow response from the initiator’s end.

3 tips on transactions failures management

    • The user is more likely to make a successful payment if the payment form will be helpful with it: splitting the card number input field into four-digit blocks with automatic cursor transfer to the next block, visual imitation of a bank card, no unnecessary fields or unnecessary information. The payer should get tips at each stage of filling out the payment form: everyone appreciates convenience and time savings.
    • Owners of online business can contribute to their conversion rates themselves, for example, by reducing the requirements for 3D-S control, which, however, implies increased risks. A lot depends on the companies that process card transactions — the technological capabilities of a payment gateway can maximise the conversion.
    • Analyse the reasons for transaction failure and abandoned carts: according to statistics, after several reminders to customers about an unfinished purchase, sales results increase by 2.4 times compared to cases when one was just sent a formal message.

Useful tip: optimise emails for viewing from portable devices (in e-commerce, 54% of views are made from smartphones and tablets), especially the “buy now” and “order now” action buttons.

We at offer a holistic solution for proper transaction processing with minimal failures. Our user-friendly and intuitive Checkout offers step-by-step instructions for making hassle-free payments. It provides a high transaction approval rate, features a 99.99% uptime, and an agile monitoring service. Thus, each payment declined during automatic verification can be verified manually. Checkout can be customised based on personal requirements: an individual form made under the terms of an online store sharply increases the status of the operation, increases the payer’s confidence and, as a result, boosts conversion.

In the process of fraud monitoring, uses robust security filters that meet all the requirements of the PCI DSS Level 1, which makes it possible to quickly and with the maximum degree of probability recognize and prevent fraudulent transactions.

Sure, failures in online payments are not entirely avoidable. But knowing the main reasons can help you make payments in a much easier manner. The main entrepreneur’s task is business development, not technology. Contact our sales and we’ll help you find the best solution for hassle-free transaction processing tailored to your business.

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