CATEGORY - PAYMENTS
Payments - 9 Nov, 2023
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Table of Contents
- 1 - Payment Failed – but why?
- 2 - Payment Failed – how can we prevent them?
- 3 - What are the various Types of Online Payment Fail?
- 4 - What are the reasons for payment failed?
- 4.1 - Compromised Security
- 4.2 - Failures of online payments are caused by additional factors
- 4.3 - The Downtime of the system
- 4.4 - Considerations for choosing a Secure Payment Gateway
- 4.5 - Tips to help reduce online payment failure
Payment Failed – but why?
When conducting an online transaction, there are many reasons that may lead to an unsuccessful transaction. In India, most often, when an online transaction fails, a pop-up message appears saying –
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“Payment Declined: try another bank account or call your bank”
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“Couldn’t reach server”
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“It looks like you bank is temporarily not accepting payment requests. Please try again”
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“Bank server unavailable – it looks like your UPI ID provider is temporarily not accepting payment requests”
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“Your bank server didn’t respond. Please try again”
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“Oops! Something went wrong. (U09) any amount deducted will be refunded in 3-5 working days”
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“You’ve exceeded the daily transaction amount set by your bank”
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“Unable to find bank account- Your bank’s servers didn’t respond. Please try again later”
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“Couldn’t get account balance- Incorrect UPI PIN entered too many times. Reset PIN and try again, you may need to wait up to 24hrs”
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“Uh ho! there was a problem. We couldn’t complete this action. Try a different verification, payment method, or contact us.
The reasons foe a failed payment cab be many and varied. A merchant may have a faulty system or an incorrect system address, while a customer may be unable to make a purchase because of insufficient funds.
If your business accepts recurring payments through a payment gateway, payment processor, card network, direct debit network, or virtual wallet, chances are you’ll experience payment failures at some point.
To prevent recurring payments from being unsuccessful, businesses can use some effective measures to prevent failed digital payments.
Payment Failed – how can we prevent them?
There is nothing more exhausting than seeing a screen that tells us, ‘Payment failure, please try again? The pain of going through the whole process of online payment (even though it takes only a few minutes) is horrendous. In addition, many customers give up after experiencing this issue more than once and just move on to the next web store.
According to studies, 40% of people do not complete the payment if the failure message appears, and it represents a huge loss to online shops or ecommerce platforms. Think about how bad that is for business?
It’s important not to overlook this issue, online payments are becoming the norm for receiving payments, so don’t ignore it. It can cause cart abandonment and you may lose number of customers.
Despite the fact online payment fails for many reasons, any glitch in each of these entities can result in a transaction failing. Each payment gateway maintains its own security measures, so the data regarding a single transaction passed through a series of hurdles before it reached its destination.
All About Payment Processing
For Example, consider the following as a basic example of a typical flow data in online payment transactions procedure:
You probably don’t know what steps are being taken to ensure payment security. One of these measures is OTPs. They enable authentication and verify that the person initiating the payment owns the card. It may be necessary to add some additional steps to the data flow when you apply coupons or discounts related to cards.
Tokenization is one of the examples that the Reserve Bank of India (RBI) has implemented to ensure secure card transactions as it ensures that the merchant doesn’t have access to actual card details during transaction processing. An entity can store the last four digits of the card number and the name of the card issuer in order to track transactions and reconcile records.
What are the various Types of Online Payment Fail?
According to the category, payment failures fall into different categories.
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Failure of online payments by consumers – Incomplete payments can be caused by incorrect card details, faulty one-time passwords (OTP), or insufficient funds in an account.
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Failure of the merchant to process an online payment – A seller can be held responsible for these types of failures when there is a technical error or security problem.
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Failure to complete an online payment when a data transfer error occurs – A payment failure message is displayed to the customer, but the payment goes through, debiting the cardholder’s account.
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Failure to charge an online payment – The payment failed and no debit was made to the customer’s account.
What are the reasons for payment failed?
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Compromised Security
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The Bank Identification Number (BIN) has been blacklisted – The system checks a customer’s authenticity if any red flags are raised on his BIN on the card. When the BIN on the card is blacklisted, the transaction can be cancelled. Blacklisting tracks and records cardholders who show inconsistent activity.
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A transaction has exceeded the maximum limit – Payment gateways may decline the transaction if the merchant sets a maximum transaction amount.
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Security Threats Exist – The issuing bank may block or decline a transaction if suspicious activity threatens security.
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Failures of online payments are caused by additional factors
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Payments are blocked by the merchant account.
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Expiration or cancellation of a credit or debit card.
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An invalid billing address has been entered.
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Cardholder’s account was flagged by the bank.
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Credit card debt has reached the limit of the customer’s card.
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Unconfigured payment gateway.
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Online payment method selected by consumer isn’t supported by payment gateway.
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There is suspension or closure of the consumer’s account.
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The Downtime of the system
The banks, including issuers, are armed with advanced technology that detects and analyses fraud. Virtually every participating party in online payment processing must adhere to security requirements.
Fraud detection tools check whether online transactions are authentic based on previous spending patterns and block or decline transactions if something does not seem right.
Transactions can be declined or blocked for a number of reasons:
There are a few additional reasons to be aware of when it comes to online payment fail, below are a few which we seem regular happen in:
There are several factors involved in the online payment process, including payment gateways, payment processors, acquiring banks, and issuing banks. Each of them experiences downtime, no matter how planned it may be.
A failure in the online payment process occurs when any of the key players involved in the transaction experience downtime. When this happens, the transaction cannot be completed and a failure occurs in the online payment process.
Considerations for choosing a Secure Payment Gateway
It is inevitable that some online payments will fail. However, by choosing a payment service provider (PSP) that is secure and offers advanced features, as well as the ability to accept different payments types, you can reduce the number of failed online payments.
Online payments are routed to different parties during the process, including the payment processors. Payment Gateways that restrict payments to a single processor may cause system downtimes and failed payments.
Several payment processors are used by Easebuzz, so you won’t receive a payment failure notice too soon. By routing your payments to a different processor, you will obtain more approvals and better service to your customers.
The following are the factors which should be taken into consideration before choosing an online payment gateway provider:
Steps to follows
1. A payment flow that is Appropriate
2. Selecting the Right Product
3. Ensure the safety and security of customers
4. Ensure that fees and contract requirements of the service agreement
5. Maintain Effective transactional processes
6. Ensure that all devices can be used to check out
7. The integration process is easy
8. Payments on a recurring basis
9. Accepting Payments via mobile devices
10. A customer service team available 24×7
Tips to help reduce online payment failure
Whenever a payment was previously deemed “failed” by an acquiring bank, the Easebuzz payment gateway periodically polls that bank to see if it has been redeemed as a success. If so, the gateway informs the location where the transaction was done, where they can collect the funds. There are two possible outcomes here
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A change in payment status is accepted, payments are collected and good/service is provided to the customer as promised.
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In some cases, it may not be possible for the online business to collect the payment since it is unable to provide the agreed service at the agreed time (could be due to delays in shipping, cost of purchase, or inventory issues). Customers get the money back in their accounts within 5-10 days after they receive the refund.
The reasons behind online payment failures are typically related to lack of security compliance. Even though banks and providers are primarily liable, merchants can help create a secure payment environment by following these steps.
A number of PSPs and merchant are expected to be required to comply with strong customer authentications (SCA), and your website must be SSL certified in order to accept payments. Customer’s information is kept safe while it passes between players through SSL certificates.
There is nothing more frustrating to any merchant than experiencing payment failures caused by their service providers. That is why selecting a payment processor that can safely process your payment will also help prevent payment failures. Tip: Less profit is better than no profit at all.
Ensure the payment service provider is PCI DSS level 1 compliant. If the service provider meets these standards, it will guarantee a high level of data security for payments.
It is less common for payments to fail due to technological errors than security issues. Merchants should choose a PSP whose system is technologically reliable. Consider the support quality as well. Payments may eventually fail, so choosing a PSP with quick and responsive customer service is key.
“Furthermore, Easebuzz recommends using multiple payment methods to avoid technical problems. This way, the buyer can choose the most convenient one.”
As a merchant, however, you can prompt your customers to suggest an alternative payment method if their online payment fail. By integrating another online payment service, you can avoid such losses.
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