Reduce Credit Card Declines: UpGate's Solution

💳 Problem

Many e-commerce merchants face high credit card decline rates, leading to lost revenue and frustrated customers. Declines can happen for various reasons: network issues, fraud detection systems, or insufficient funds, each contributing to potential lost sales.

GoCardless reported that card payment failures average 10% to 15% globally. It is estimated that one-third of all CNP (Card-not-present) declines are related to how merchants manage payments. To get more into context, let’s explore the most common credit card decline reasons:

Reaching the credit card limit

When a cardholder has reached or exceeded their credit card limit, the bank will decline any further transactions. This is common when customers are unaware of their available credit. Merchants can reduce lost sales by offering alternative payment options like bank transfers or enabling retry attempts via another payment method.

Transaction error

Declines due to technical transaction errors occur when there’s a communication failure between the merchant’s payment system and the issuing bank. These errors can result from issues like system timeouts, network malfunctions, or gateway failures. By implementing a cascading payment system, merchants can automatically reroute the transaction to another processor and avoid transaction interruptions.

Fraud suspicion

Banks often decline transactions that seem suspicious or fall outside the customer's typical spending behavior. This is part of their fraud prevention strategy, though it can frustrate legitimate customers. Offering secure alternative payment methods, like digital wallets or biometric authentication, can help complete the sale while ensuring safety.

Expired card

Cards that are past their expiration date will automatically be declined. While this is a straightforward reason, it can catch customers off guard. Merchants can reduce declines by sending reminders to update payment details before subscriptions renew or prompting the customer to enter a new card during checkout.

Insufficient Funds

When a debit card or bank-linked credit card doesn’t have enough available funds to cover the purchase, the transaction will be declined. Merchants can minimize these declines by offering alternative payment methods, such as financing options or split payments.

💡Solution with UpGate:

UpGate’s payment orchestration platform optimizes the payment process to reduce credit card declines, improving overall revenue significantly. Our advanced platform enables merchants to enhance transaction success through optimized routing and cascading.

Our platform optimizes payment success by routing transactions through the most suitable payment gateways based on real-time performance data. If a transaction is declined by one gateway, UpGate’s cascading feature automatically retries the payment through alternate gateways. This multi-tiered approach improves transaction success rates, minimizes failures, and reduces the risk of revenue loss from declined payments.

Popular bank declines that we cascade at UpGate:

🔹 Do Not Honor This is one of the most common decline codes issued by banks, indicating that the cardholder’s issuing bank has rejected the transaction without providing a specific reason. It can occur for various reasons, including suspicion of fraud, insufficient funds, or a block on the card. UpGate’s cascading solutions help reroute the transaction through an alternative payment processor, improving the chances of approval and reducing customer drop-offs.

🔹 Generic Declines Generic decline codes often indicate a broad issue such as a card not being authorized for online payments or international transactions. These declines can be frustrating because they offer little insight into the specific problem. With UpGate, merchants can automatically retry the payment with another processor, increasing the likelihood of a successful transaction and avoiding unnecessary revenue loss.

🔹 Technical Errors/Timeouts/Malfunctions Payment processing errors such as system malfunctions, timeout issues, or communication errors between banks and processors can result in declined transactions even when the customer’s payment information is correct. UpGate’s advanced system monitors these situations and triggers an automatic failover to another processor, ensuring minimal disruption and smooth transaction flow.

🚀 Result: Merchants using UpGate, on an orchestration chain of 2-3 acquirers have seen a 15-20% improve acceptance. By ensuring more transactions go through, UpGate helps businesses capture revenue that would have otherwise been lost.

Minimizing credit card decline rates is crucial for any e-commerce business looking to optimize revenue and provide a seamless customer experience. Each declined transaction represents not only a lost sale but also a potential loss of customer trust. By reducing declines, merchants can ensure smoother payment flows, higher customer satisfaction, and ultimately, more successful transactions. UpGate’s advanced payment orchestration platform offers the tools needed to address these challenges, from intelligent routing to data-driven insights.

Ready to take control of your payment success and reduce declines? Book a demo today at upgate.com and discover how UpGate can transform your payment process.