How to decrease transaction decline rate in recurring billing?

on Jul31
transaction decline
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers
Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights. Read more
transaction decline
Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers
Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. Read more

How to reduce the number of credit card transaction declines in recurring billing environment?

There are many common reasons behind soft declines and hard declines. Many payment declines result from the fact that either expiration date or credit card number specified during the initial transaction submission is invalid. Respective transaction decline codes (“invalid expiration date” or “invalid credit card number”) are generated by the host payment system. In case of “invalid card number” the specific reason behind the decline must be verified with the cardholder. “Invalid expiration date” response means that either the card really expired, or the expiration date specified during transaction submission and the expiration date on the card are not the same.

In some cases usage of recurring indicator might increase approval rates.

What is a ‘recurring’ indicator?

A recurring indicator is a special ‘flag’, which marks the transaction as a recurring one.

If a processed transaction is a recurring one, it should be marked with a recurring indicator. If a recurring transaction is marked with the indicator, most issuers might still approve it even if card\account expiration date is in the past.

In other words, if during some billing period the ‘invalid expiration date’ response is received by the submitter, but it is recorded that recurring payments from the card were successfully coming through during previous recurrence periods (there is a previous processing history), the transaction, bearing the ‘recurring’ indicator, might still be processed.

What is an account updater? How can credit card account updater improve approval rates?

Account updater is a service offered by issuing banks through acquirers, which allows to get updated information on a particular card of the issuer. The information can include updated holder name (if there’s been a name change), updated expiration date, updated account number (if account number has been changed due to fraud, or because card has been lost\stolen).

Account updater is a handy tool in recurring billing environment, where usage of the most up-to-date payment information can eliminate potential declines caused by invalid card numbers, or expired credit cards.

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