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Payment processing decline recovery solutions

Transactions are often declined due to out-of-date card and billing information.

After having an online payment declined, one-quarter of rejected shoppers either give up or decide to shop with another online merchant.

One-third will blame the retailer for the unhappy incident. After all, if the customer experience fills shoppers with the sinking feelings of dread, frustration, confusion and embarrassment, they're not likely to experience brand resonance, trust or loyalty. They may never visit the same site again.

"One-third of declined shoppers blame the retailer."

Payment declines in ecommerce don't just tarnish a brand; they have a direct impact on the bottom line, too. In 2018, Accenture estimated annual losses of up to $40 billion due to fraudulent card-not-present (CNP) charges that made it through weak detection systems.

Another industry study estimated $331 billion in 2018 losses due to declines of valid payments, accounting for both card-present and CNP transactions.

Why payments are declined

Clumsy fraud detection systems can go overboard, blocking out transactions that have more to do with human error than ill intentions. Industry data suggests that between 30% to 70% of declined transactions should be authorized.

Here are some of the most common reasons why CNP payments are declined:

  • Expired card details.
  • Out-of-date billing information.
  • Incorrectly entered data.
  • Payment processing system failure.
  • Nonsufficient funds.
  • Temporary account hold.

The last two issues aren't within an e-tailer's control, but the first four certainly are. Simply reentering the data correctly and resubmitting the checkout form can result in a successful transaction.

Recovery and prevention

The following strategies and systems, available through SFG's flexible order management system, can help online merchants avoid false declines and fraudulent activity:

Address standardization

A typo in a billing zip code can bring an entire transaction to a halt. Not so with address standardization technology. When customers attempt to submit an order with incorrect or missing address information, FlexOMS will take a moment to identify and correct the issue, so that the transaction proceeds smoothly — and the order gets to the right destination.

Secure credit card authorization

Working to make sure credit card companies don't falsely decline payments, FlexOMS takes the necessary measure to verify that the payment details entered are accurate and authorized. Furthermore, compliance with the Payment Card Industry Data Security Standard (PCI DSS) ensures that customer data is safe from harm's reach.

Flexible payment options

SFG's FlexOMS allows merchants to choose how to accept payments. Billing options include:

  • Flexible invoicing.
  • Installment billing.
  • Negative-option billing.
  • Payments from more than one source.

If the issue has something to do with a shopper's personal finances, such as insufficient funds on one particular credit card, they can complete the transaction with another form of payment or a payment plan.

Robust customer database

With a 360-degree view of the customer, merchants will be able to tell who is a valid, valued customer — and who might not be. By collecting the right customer data, they'll also be able to see where each shopper is located. If user data points to an international address, shopping cart activity is less likely to be flagged as fraudulent.

Contact an SFG specialist to learn more about FlexOMS and how it can help you combat the substantial losses and involuntary churn associated with payment declines and win back customers' dollars and trust.

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