When setting up new online payment infrastructure, businesses usually want to start accepting payments quickly without worrying about building a complex system. The right payment partner makes this complexity easy to navigate for merchants.
Why is it worth collaborating with a payment service provider (PSP)? Payments in local and emerging markets are often harder to develop. Specific countries and regions have different regulations, risks, and challenges. Teaming up with a PSP helps to streamline payments and prevent transactions from being declined.
What are some of the common reasons behind a payment decline? A transaction might fail to process for many reasons, but most fall into three main categories:
- Technical issues
- Financial issues related to the customer’s card or bank account
- Risk-assessment issues
Technical reasons for a transaction failure may be harder to grasp than a problem such as insufficient funds. For example, a network failure from any one of the many entities involved in processing a transaction could cause an error with the entire payment.
Other failed payments may be due to anti-fraud rules rejecting the transaction, or another error related to the authentication process. Some estimates put the number of payment declines at 2.6 of all e-commerce payments. What’s more, the impact of so-called “false declines” – legitimate payments that are nonetheless declined – is estimated to result in $430 billion of lost e-commerce revenue annually.
Handling an error and identifying what caused it is always challenging. Luckily, merchants can take a few steps to decrease the frequency of payment declines and their impact on business. One of them is intelligent payment routing.