Approval rate for online processing

One of the most concerned questions from the online merchant is the approval rate. Approval transaction is the actual processed funds that has been successfully charged instead of the total purchased customers’ payments requests. So the approval rate directly affect the merchant’s revenue. What is the reason that affect the merchant’s actual approval volume.

Transaction failed reason is various. It may be from customer or the bank, or the acquiring bank, or internet problem, fraudulent transaction.

Credit card payment declined from customer: customer may wrongly input the card info, such as: 1.card number, account number, cvv2 or security code, expiration time. It caused invalid card information that bank simply cannot find the account or fail to match the information.  2. Insufficient funds: The customer better to check the balance before a payment submitted. Sometimes the insufficient funds declined caused from slightly overcharge by currency exchange rate. The merchant should inform the customer regarding this before transaction processed.

Declined from bank system: each bank has their own verification system for risk control. The verification mechanism is different dependent on different banks. But the purpose is the same: to block/reject transactions that fail to pass the risk control system. There are many situations may cause the decline. 1. Customer country limit: the issuing bank does not accept the country where the transaction requested for a specific card kind. 2. Customer amount/times limit: The bank system has max amount limit for a single transaction, and total times available within 24 hours for one credit card 3. The bank system also has card holder IP limit for approval times within 24 hours. 4. Customer’s card has been considered as frequently paid during a short period and will be declined as risky factors. 5. Some card number’s first 6 digits are blocked for a particular bank. So this kind of reasons are all dependent on the bank system insider setting.

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