Suppose, you are a new growing business, trying to maintain the best quality of your product or service, ready to give best experience to the customer, putting every effort to convince your audience and when you are about to get the result of your hard work the customer’s bank declined the transaction request. Sound’s bad and feels even worst. To save your sales you need to understand the declination for credit card processing and the reasons behind it.


During a transaction credit card is approved by the customer’s issuing bank. When the approval is declined for a particular reason, a credit card payment cannot be processed. It can be declined by the payment gateway, the processor, or the bank issuing the money. The transaction takes place when credit card number and expiry dates are valid, there is enough credit for the transaction and that the card has not been reported as stolen or compromised.

Sometimes we can catch the reason behind declination by reading the response code but the actual reason can only be confirmed by the customer’s bank.


There are two types of decline which informs how you should handle it.

  • Hard Decline: Error which can’t be resolved immediately is known has hard decline. It occurs when the issuing bank does not approve a payment or processing. Reasons for hard declines include “card stolen”, “invalid card” or “account closed.
  • Soft Decline: Errors which are temporary and retrying the provided payment method information may be successful is known as soft decline. It occurs when the bank has approved the payment but the transaction fails somewhere else. Reasons for soft declines include “insufficient fund”, “processor declined” or “voice authorization required”.
    The processor or the payment gateway can also decline transactions, but for different reasons. In most of the cases bank decline transactions and do not provide any detailed reason for the decline to avoid fraudsters. If you have faced the problem of credit card declination following could be the cause:
  • Invalid credit card number: MOD10 check completes when “invalid card” error is received.  Many times the cause of this is an incorrect credit card number or a credit card number entered incorrectly. The above mentioned formula is used to validate a variety of identification numbers, if the formula was unable to validate the card numbers meaning the card you entered is invalid. In such a situation, the customer needs to try a different number.
  • Expired credit card: This error is quite tricky- it could mean the card is expired or the expiration date does not match the date on file. If the card has crossed the expiry date mentioned on the front, then the customer won’t be able to use it as the network will not process. In such condition, the alternate payment method will be needed. Also, your credit card issuer may have sent a replacement card in the mail. You just need to get the new card, activate it and provide the updated expiry date.
  • Insufficient available credit: Your available credit is the difference between your credit card balance and your credit limit. For instance, if you are using a debit card and your account does not have sufficient fund, the transaction will not proceed. In the same way, if you are using a credit card and you have reached your credit limit, the purchase will not go through. Usually, after spending spree, you could run out available credit. It is best advised to keep the balance under 30% of your limit and under 10% if you want to maintain an excellent credit score.
  • Call for Auth: This is a temporary decline and can be resolved through a potential pathway. This happens because the bank is not sure about the transaction and would like the merchant to call the processor’s call-for-auth center to do complete verification on the transaction. Such dispute can be solved over the phone and the call center agent will provide you an approval code for capture.
  • Unusual activity / location: If you never use your credit card for anything bigger and suddenly use it for the some expensive payment or you are making payment other than the place from where you normally make purchases, in both the cases you might get a “no” at the register. That’s because your credit card issuer considers the purchase behavior and notice the geographical boundaries in which you purchase. It helps as an indication if someone else is attempting to use your card.
    To avoid this problem it’s better to inform the issuer by calling the number given at the back of the card.
  • Pick up card: The transaction message “PICK UP CARD” is a decline notification sent by the customer’s bank.  This error message is due to either the card having being expired and no longer in circulation or because the credit card has been reported stolen. In other words, if a card holder has had his/her card stolen, lost the card, or the issuing bank has closed the account, any attempt to process a transaction will generate Pick Up Card message. Merchants are advised to not process a fraudulent transaction and should never compromise their safety by recapturing the card.
  • Need an EMV card: Here, EMV stands for EuroPay, MasterCard and Visa. If you are travelling with an American credit card, it might not work. Around the globe, EMV technology has been adapted. Now, credit card readers require a card that has an embedded computer chip and PIN entered by the user.


So far we have discussed some common and main reasons for the decline. Now, here are few tips for dealing with declines which if taken into consideration would help a lot.

Something which is entirely in your control is fraud net. Most gateways allow merchants to customize the rules to catch the suspicious transaction. Ignoring, blocking or flagging payments that fail is in your hand.

  • For customers, if you are planning to make an unusual purchase or travel with your card, inform your issuer in advance to be on the safer side.
  • For the payment of smaller amount use an alternative. Try to avoid credit card because there are a chance of being flagged for fraud.
  • There are a certain type of purchase restrictions on some credit cards, mostly business and corporate cards. SIC i.e. Standard Industry Code is the reason behind such prohibition and same can be removed by contacting the issuing bank.
  • To avoid processing fraudulent transactions use address verification services to check the validity and authenticity of transactions.
  • Your merchant account may be flagged for fraud or abuse if you keep processing the credit card repeatedly even after getting decline messages. Better ask the customer for another payment method.
  • By default, some credit cards have restriction over international payments or transactions. To remove the hindrance customer should need to talk to their issuing bank and ask to unlock the card so that you can process it again. Customer can call the number given at the back of the card.
  • Try to make all your payments on time and keep your credit card in good standing.
    By keeping the causes and tips to deal with the decline in mind, you can easily make credit card payments, run a smooth business and save your sales. For more support, give iPayTotal a chance to enhance your business and experience the best service across the globe.

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