By Fernanda Mathias
As a business owner, having a high volume of declined transactions brings a series of negative impacts – penalties from the payment network and losses worth billions of dollars.
A recent study estimated that 1.9 billion card-not-present transactions are declined each year globally, representing $145 billion in sales.
Online shopping changed the dynamics of consumers and opened opportunities for new merchants. In 2019, an estimated 1.92 billion people purchased goods or services online. In 2020, global retail e-commerce traffic stood at a record 22 billion monthly visits.
It is not the time to close doors to those buyers, but to be prepared to face the challenges of online business, such as declined transactions. Here are a few common reasons behind declined transactions.
A few reasons why you have declined transactions
- Transaction error
Transaction error is the second most common reason for credit card declines. According to data, an average of 20.6% of customers mistakenly enter erroneous data while entering their payment details. As a merchant, you can avoid these mistakes by verifying the customer’s information and preventing errors.
- Lost or stolen card
If the card owner reported the payment card as lost or stolen, the transaction would be declined by the issuing bank. You should make sure that you inform the transaction attempt and that your client can use an alternative card.
- Conversion fees
In addition, some clients are not always aware of the added conversion fees, which can be the reason for transaction declines, so adding a conversion table would help customers see what fees may apply (if applicable). This could end in insufficient funds or a chargeback, and even a flagged transaction as they call the issuing bank.
- Insufficient funds
Customers who purchase using a debit card may have a declined transaction due to insufficient funds. You can also suggest using an alternative debit or credit card to avoid a new declined transaction.
How to avoid declined transactions
It is possible to avoid having a declined transaction and even prevent them from happening if you make the right decisions.
When you offer your customers alternative payment methods, you assure them they do not need to rely exclusively on credit or debit payments. If your customer has a problem with their credit card, he or she can use different payment options, such as cryptocurrencies.
You must also have a safe online platform, ensuring every transaction is verified and secure to reduce fraudulent activity or transaction errors.
At iPayTotal, we can help you minimise transaction declines by offering a secure platform that allows your clients to purchase safely using a secure payment gateway. We specialise in high-risk businesses and provide customised solutions for merchants who want to expand their companies and increase profit.
Contact us today at iPayTotal and talk to our team of experts about how to reduce and eradicate declined transactions.