Credit Card Decline Messages: What They Mean, and How Recurly Responds
Editor's note: This post was updated with current data in August 2020.
“Insufficient Funds”, “Invalid Card Number”... phrases that merchants fear most. Especially the mysterious, ambiguous “Declined”.
These are messages that accompany a declined credit card. But the decline is not the end of the road for merchants using Recurly. Our service automatically retries many failed transactions. These retries are frequently successful, recovering otherwise-lost money and preventing subscribers from churning.
A successful retry depends on many factors, including the decline message. Of the dozens of decline messages we see, these are the most common:
The “Expired Card” error is tricky - it could mean the card is expired or the expiration date does not match the date on file.
B2C merchants usually receive more generic “Declined” and “Insufficient Funds” responses than B2B merchants, because businesses typically have higher credit limits than consumers.
Keep in mind that decline reasons are not standardized across payment gateways. PayPal tends to return the least amount of information about a decline, while the Recurly gateway (TSYS) and Vantiv (formerly known as Litle & Co.) tend to be the most descriptive.
However, the decline reason tends to originate with the customer’s bank. Some banks simply don’t provide the payment gateway with any further details, which ultimately generates so many “Declined” responses.
How Can Companies Avoid Credit Card Failures?
First, review the makeup of your customers. If you have many international customers, consider requiring fewer address fields. Generally, the more address fields you require, the higher your declines. Consult your payment gateway’s documentation and make sure you’re only sending the address fields that your gateway requires (of course, if you’re collecting taxes, you should make sure you’re collecting the address fields necessary to calculate them).
Second, Recurly merchants can customize the communication their customers receive when a payment fails. Read more about this process, which we call “dunning management,” in a blog post by our Senior Director of Customer Support, Rachel Quick.
How much money does Recurly recover after initial transactions fail?
How did Recurly recover these transactions? Either one of Recurly’s automatic retry techniques succeeded, or the customer entered new billing information that was accepted by the payment gateway.
You might be wondering how decline rates differ in various countries - for instance, if you’re a merchant in the United States, should you expect higher decline rates for UK customers? That’s the topic of my next blog post, coming soon.
For more information about how Recurly can save your business money, get in touch with us!