Online shopping has changed the dynamic of consumers and has opened opportunities for new merchants. Statistics show that in 2019, an estimated 1.92 billion people purchased goods or services online. — However, in 2020, global retail e-commerce traffic stood at a record 22 billion monthly visits.
Still, as technology advances and improves payment alternatives for customers and merchants, new challenges arise, which include a higher number of credit card declines.
A recent study estimated that 1.9 billion card-not-present transactions are declined each year globally, representing $145 billion in sales.
A high volume of credit card declines can bring a series of negative impacts for merchants, including penalties from the payment network that slowly increases as the high denial ratio remains without a solution for a long time.
Common reasons behind a declined credit card transaction
- Insufficient funds
A study revealed that more than 44% of denied transactions are due to insufficient funds. If a customer uses a credit card and hits the credit limit, the issuing bank will decline the purchase.
- Transaction error
Other statistics have shown that 20.6% of customers have mistakenly entered erroneous data while entering their payment details. Transaction error is the second most common reason for credit card declines and can negatively impact the merchant’s business.
- Lost or stolen card
Many credit card denials occur because the card owner reported the payment card as lost or stolen – as a result, the transaction is declined by the issuing bank. It is recommended not to retry the operation or to provide additional goods or services to the cardholder.
Merchants are encouraged to report the transaction attempt to the corresponding issuing bank.
- Unusual activity
When the credit card company observes unusual activity on the credit card, it may be declined. Some activities include shopping in regions known for fraudulent activity, a sudden change in shopping habits and sometimes even small purchases may trigger a decline if it looks suspicious.
Helping customers to deal with card declines
Many business owners believe it is impossible to prevent and avoid credit card declines; however, a few actions can help your customers handle card declines and finish their purchase.
- As a merchant, you can offer customers alternative payment options to ensure they do not need to rely exclusively on credit or debit card payments.
- It is also essential to have a safe platform that will not trigger credit card companies to look for unusual or fraudulent activities
- Always remind customers to keep their data updated.
At iPayTotal, we can help you minimise credit card declines because we offer you multiple payment options, such as Bitcoin, advanced security tools such as 3D secure processing, and a safe payment gateway so that your customers can purchase safely.
We specialise in high-risk businesses and offer 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.
We are ready to provide you with a custom-made solution and answer any questions about the process.
Apply now for a high-risk merchant account at iPayTotal and change the course of your business.