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Declined Transactions And Their Reason Codes

If your business processes card payments, you’ve likely come across declined transactions.
One of the more frustrating decline messages is “Do Not Honour.” This and other decline reason codes are crucial for understanding why a transaction wasn’t successful, but they often leave both merchants and customers confused.

In this blog, we’ll break down common decline reason codes, what they mean, and how to address them.

What Are Decline Reason Codes?
Decline reason codes are messages sent from card-issuing banks or financial institutions when they refuse to approve a payment. Each code indicates a specific reason for the transaction failure, providing merchants with insight into the issue, and in some cases, offering a way to resolve it.

Common Decline Codes

  1. Do Not Honour - This is one of the most common and ambiguous decline messages. A “Do Not Honour” code means the card issuer is unwilling to approve the transaction but does not provide a specific reason. The cardholder should contact their bank for further details, as the issue could be due to a multitude of different reasons.
  2. Invalid card details - Customer has entered incorrect card details. This could reason code could cover card number, expiry date, or CVV. Cardholder should be prompted to resubmit card details.
  3. Insufficient funds – Customers payment method doesn’t have enough money to fulfil the transaction value. Merchant should offer a range of payment methods for card holder to allow them to payment using an alternative method.
  4. Suspected Fraud – This occurs when the issuer suspects fraudulent activity related to a transaction. This suspicion could arise from various factors, such as the transaction being flagged as high-risk, unusual spending patterns that deviate from the cardholder's typical behaviour, or any other red flags that indicate the payment might not be legitimate.
  5. Expired Card – This issue commonly arises with recurring payments when the card on file has expired. It can also occur if a customer uses an old or expired card, or if they enter an incorrect expiry date. The payment gateway would flag the transaction as expired if the date entered is in the past. Implementing an account updater service can help mitigate this issue. Instead of automatically declining the transaction, the system will check with the scheme database for an updated card to complete the payment.
  6. Invalid payment data – Your merchant account is not configured to accept this transaction. This could be due to currency, card type or brand. Speak with your designated PSP to understand this restriction.
  7. Bin Blacklisted – Purchase blocked due to BIN number being assigned to blacklisted or restricted country.

In all cases it is important to track and monitor declined transactions to see whether these are genuine or preventable. Working with your gateway and acquirer is pivotal to analyse and ensure that you have the correct set up to allow as many genuine transactions as possible to be approved.
Creating workflows to ensure payments are approved is vital to all businesses accepting card payments.
Providing a range of payment methods can also ensure that businesses offer alternative methods of payment ensuring the capture funds.

 

Written By Matt Booth Sales Director 2